Thursday, October 4, 2012

Oil Prices Jump on Mideast Turmoil, Refinery Fires

Several events on Thursday caused the price of crude oil futures to rise, as Turkey attacked Syria and refinery fires in Texas and Russia helped oil to climbed by four percent over Wednesday.

In the Middle East, Turkey hit Syria with retaliatory strikes after parts of the southeastern part of Turkey were shelled yesterday.

The Turkish parliament also sent a message to Syria by approving further strikes if Syrian internal battles end up spilling over into Turkey again.

Concerns that things could escalate and oil supply disruptions could result are the main impetus behind the rise in prices. Shorts started covering their positions after the plunge in oil prices on Wednesday.

Oil Refinery Fires

As for the other events, the refinery of Exxon Mobil (XOM) in Baytown, Texas, which is the largest refinery operating in the U.S. at this time, caught on fire. It produces an average of 560,000 barrels a day.

In Russia, a refinery in Saratov, which produces about 130,000 barrels a day, also caught fire.

Oil settled at $91.71 a barrel, jumping $3.57, or 4 percent, on the New York Mercantile Exchange.

The national average for a gallon of regular gasoline rose to $3.784, up two-tenths of a cent from Wednesday, and 38 cents in comparison to a year ago, according to AAA.

Brent crude increased by $4.41, or 4.1 percent, to $112.58.

Natural gas was up a penny to $3.406 per 1,000 cubic feet.

Heating oil climbed 12.2 cents, or 4 percent, to $3.1884 a gallon.

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