BUSINESS

Oil up on questions about when refining, supply operations will return to normal

11/01/2012 12:56 EDT | Updated 01/01/2013 05:12 EST
The price of oil is rising as operations at refineries and supply terminals in the U.S. Northeast remained restricted three days after Superstorm Sandy.

Benchmark West Texas Intermediate crude gained 60 cents Thursday to US$86.84 a barrel in afternoon trading in New York.

Power outages are hampering refineries, storage tanks and supply terminals as they work to restore operations, largely in New York and New Jersey. Imports of oil are also limited, adding to supply problems.

Service stations in many cities have closed because of they can't get gasoline delivered or lack the power to pump it out of their tanks. That's left motorists to search for stations that are open and wait in long lines to fill their tanks.

Some positive U.S. economic news is also boosting oil. Reports for October showed that manufacturing expanded for the second straight month, private businesses added more jobs and consumer confidence was at the highest level in nearly five years. And the government says crude inventories shrank last week.

The next key report is due Friday when the government releases the October jobs data.

A healthier economy can increase demand for energy products as more consumers commute to work and manufacturing facilities buy more diesel to power operations.

In London, Brent crude, which is used to price international varieties of oil, fell 66 cents to US$108.04 a barrel.

In other trading, heating oil fell three cents to US$3.03 a U.S. gallon (3.79 litres) and wholesale gasoline rose one cent to US$2.64 a gallon.

Natural gas also gained a penny to US$3.83 per 1,000 cubic feet, even as the U.S. Energy Department said inventories rose last week to a level that was 7.1 per cent above the five-year average.

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