Commodity Corner: Oil, Gasoline Ride Wave of Miss. River Flood Fears
The swollen Mississippi River crested at Memphis, Tenn., Tuesday, but its potential effects on refineries downriver in South Louisiana pressured oil and gasoline prices higher on the second trading day of the week.
Crude oil for June delivery gained $1.33 to settle at $103.88 Tuesday while front-month gasoline increased by a dime to end the day at $3.38 a gallon. In both cases, investors are concerned that a potentially record-setting Lower Mississippi flood could create operational problems at the string of refineries between Baton Rouge and New Orleans. Refineries abutting the river within this corridor can process more than 2 million barrels of oil per day.
Investors also fear the floodwaters' potential impact on riverborne shipments of crude oil and petroleum products in the Lower Mississippi.
Oil traded within a range from $100.12 to $103.66 while gasoline fluctuated from $3.26 to $3.38.
Buoyed by predictions of stronger air conditioning demand in the South, June natural gas rose by 10 cents to settle at $4.25 per thousand cubic feet Tuesday.
Natural gas peaked at $4.27 and bottomed out at $4.16.