Fuel oil and gasoline gained after crude oil after the Trans-Alaska Pipeline System was closed on January 8, forcing companies including BP Plc to 95 percent of production to suspend from the North Slope area.
Futures rose as operators of the pipeline, a 800-mile (1300 km) network crossing the northern U.S. state, could not say when the link is reopened. The system starts in Prudhoe Bay on the North Slope to Valdez is the northernmost ice-free port in North America.
“The market seems to be due to concerns about the Alaska pipeline, a leak this weekend,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Products are just tagging along with crude oil.”
Heating oil for February delivery rose 5.65 cents, or 2.3 percent, to $ 2.5428 a gallon at 9:49 am on the New York Mercantile Exchange. The heating oil crack spread, based on February contracts, widened $ 1.16 to $ 17.55 a barrel.
Crude oil for February delivery added $ 1.23, or 1.4 percent, to $ 89.26 a barrel.
“You have 600,000 barrels per day of production of crude oil taken offline,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil was also given as New York City and the rest of the tri-state area is 6 to 12 inches (15 to 30 centimeters) of snow received from a storm that the National Weather Service said later it will arrive tomorrow.
“Fuel is step by step because you have more winter weather forecast for the East Coast this week and probably the coldest temperature of the year, for much of the Northeast,” said Tom Knight, vice president of marketing and supply Truman Arnold Cos. in Texarkana, Texas.
Gasoline for February delivery gained 3.33 cents, or 1.4 percent, to $ 2.4464 a gallon. The gasoline crack spread, based contracts in February, was extended to 23 cents $ 13.55 a barrel.
Regular gasoline at the pump, national average, remained unchanged at $ 3.088 a gallon yesterday, AAA said on its website.
source:bloomberg
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