Commodity Corner: Oil, Natural Gas Surge

Front-month crude oil continued its ascent Tuesday, supported by ongoing tensions in Libya and the prospect of a long recovery in Japan following the March 11 earthquake and tsunami.

Oil for April delivery gained $1.67 to end the day at $104.00 as investors weighed the prospect that Libyan-sourced crude oil will be unavailable indefinitely. Fighting between forces loyal to Colonel Qaddafi and a coalition of rebels and Western forces shows no sign of letting up quickly. Also, reports from news outlets such as the New York Times and Bloomberg reveal that NATO members France, Britain, and the U.S. have been quarreling over how their joint Libyan military campaign should be run.

Also placing upward pressure on crude was the projected sustained increase in fuel demand arising from the rebuilding of devastated areas in Japan.

Oil traded within a range from $101.43 to $104.54 Tuesday.

The calendar may state that spring has sprung in the Northern Hemisphere, but wintry conditions have made a comeback in the Upper Midwest and Northeast. As a result, April natural gas surged nine cents to settle at $4.25 per thousand cubic feet.

Tuesday's natural gas futures price peaked at $4.26 and bottomed out at $4.15.

The futures price of gasoline, which often moves in tandem with oil prices, remained virtually flat Tuesday. April gasoline gained 0.3 cent to end the day at $3.00 a gallon. It fluctuated from $2.97 to $3.01.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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Brent Crude Oil : $51.68/BBL 0.27%
Light Crude Oil : $49.25/BBL 0.74%
Natural Gas : $3.24/MMBtu 3.18%
Updated in last 24 hours