Oil rises as Irene heads for the East Coast

AP News
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Posted: Aug 25, 2011 3:12 PM
Oil rises as Irene heads for the East Coast

Oil rose Thursday as concerns grew about the potential impact of Hurricane Irene on U.S. oil and gas supplies.

Benchmark West Texas Intermediate crude rose 14 cents to finish at $85.30 per barrel in New York. Brent crude, which is used to price oil produced abroad, rose 47 cents to end the day at $110.62 per barrel in London.

Analyst Tom Bentz with BNP Paribas Commodity Futures in New York thinks Irene is pushing up oil because of the possible problems that coastal flooding could cause for refineries and shipping. Refineries in Delaware, New Jersey, Pennsylvania and Virginia produce nearly 8 percent of the country's gasoline and diesel fuel.

Irene is forecast to affect a broad area, from North Carolina to Canada, with flooding and winds as high as 120 miles an hour. Some forecasters think Irene could be the worst hurricane to hit the Northeast in 50 years.

Gasoline pump prices increased nearly a penny on Thursday to a national average of $3.582 per gallon. A gallon of regular has fallen 40 cents since peaking in May near $4 per gallon, but it's still almost 89 cents more than a year ago.

In other energy trading, heating oil rose 2.42 cents to finish at $2.9932 per gallon and gasoline futures rose 4.59 cents to end at $2.8017 per gallon. Natural gas was up almost a penny to finish at $3.931 per 1,000 cubic feet after the government said the nation's supplies rose last week.