Oil rallied in the last hour of trading on Friday to settle
higher, finishing the week up more than 2 percent after plunging the week
Last-minute buyers may be guarding against the chance that
refineries in the Southeast will be affected by Mississippi River flooding over
Most refineries in the Gulf States region don’t expect to be
affected by flooding. Still, some have lined their facilities with sandbags,
moved equipment and prepared other emergency measures. At least one refinery
near Baton Rouge, La., run by Alon USA Energy Inc., plans to close if federal
engineers open a massive spillway this weekend to divert floodwaters from Baton
Rouge and New Orleans. Hundreds of thousands of acres will be flooded
Analyst Addison Armstrong with Tradition Energy said the
flooding could halt almost 253 million cubic feet of natural gas production per
day in Louisiana as well, according to state officials. And there are concerns
that crude oil shipments and other commercial traffic on the river could be
slowed by high water, according to PFGBest analyst Phil Flynn. Delays in
getting gasoline from refiners to wholesalers have already contributed to
higher pump prices in parts of the Southeast and the Midwest.
Benchmark crude for June delivery settled at $99.65 per
barrel, up 68 cents on the New York Mercantile Exchange. Oil has been volatile
this week, ranging from $95 to $104 a barrel. It gained two and a half percent
for the week after losing 15 percent last week.
Despite last week’s drop in oil prices, drivers across the
country are paying about the same for gasoline, with the national average at
$3.982 a gallon, according to AAA, Wright Express and the Oil Price Information
Service. Motorists in 15 states and the District of Columbia pay more than $4 a
gallon. The average price is 17.4 cents more than it was a month ago and $1.092
more than a year ago.
Many analysts think pump prices will fall to around $3.50 a
gallon or less by Memorial Day, as refineries that have been sidelined by
temporary outages come back online and oil prices retreat.
The Labor Department reported that inflation in April rose
to the highest level in two years as consumers paid more for gas and food
products. There are signs that inflationary pressure may begin to ease as
prices for oil, corn, wheat and other commodities have declined this month.
In other Nymex trading in June contracts, heating oil rose
2.85 cents to settle at $2.9422 per gallon, gasoline futures added 1.05 cents
to settle at $3.0744 a gallon and natural gas gained 5.5 cents to settle at
$4.311 per 1,000 cubic feet.
In London, Brent crude rose 85 cents to settle at $113.83
per barrel on the ICE Futures exchange.