Oil prices jump back above $100 a barrel 

Oil prices rose back above $100 a barrel Monday as an oil spill in Texas closed a major shipping channel and continuing global tensions over the crisis between Russia and Ukraine brought upward pressure on prices.

Benchmark crude oil for May delivery was up 65 cents, or 0.7%, to $100.11 a barrel in electronic trading on the New York Mercantile Exchange.

An oil spill over the weekend closed the shipping channel connecting Galveston Bay and the Gulf of Mexico after a barge carrying almost 1 million gallons of heavy oil collided with a ship in the Houston Ship Channel at Texas City. A barge tank containing 168,000 gallons of oil was breached.

The channel, which typically handles as many as 80 vessels a day, will remain closed for a third day Monday and the Coast Guard said there was no timetable on when it may reopen.

“The closure could persist all week, so it may prove supportive for prices, as crude oil deliveries will be hampered,” according to The Kilduff Report edited by Michael Fitzpatrick. “Some 10 percent of the nation’s refining capacity is located at the channel.”

But if the bottleneck of vessels in the Gulf eases in a day or so, there likely wouldn’t be a lasting impact on fuel prices. But a more prolonged backup could push up prices, said Jim Ritterbusch, president of energy consultancy Jim Ritterbusch and Associates in Chicago.

In addition, the U.S. and the European Union has issued a series of sanctions against Russia for its actions in Crimea. Russia, a key supplier of crude oil and natural gas to Europe, has annexed Crimea and troops have taken control over the Ukrainian region.

“If the West were to impose additional sanctions on Russia, this could — at least theoretically — curb Russian oil exports and justify a certain price premium,” analysts at Commerzbank in Frankfurt said in a note to clients.

(By David Carrig)

Contributing: The Associated Press

Source: USAtoday

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