Not-A-Pundit: The Renaissance

NEW YORK (Dow Jones)–Crude oil futures in New York ended largely unchanged Friday as concerns over Gulf Coast refinery disruptions caused by the closure of a key Louisiana waterway eased.

The closure of the Calcasieu Ship Channel forced four refineries in the region to trim their production, fueling a sharp rally in gasoline futures and lifting crude futures above $71.00 a barrel for the second time this week.

However, none of the affected refineries asked the government for oil loans and traders concluded that the impact wouldn’t last long.

“Traders did not feel that these were going to be either long lasting or severe enough (disruptions) to have a lasting effect on the market,” said Peter Beutel, president of Cameron Hanover, a trading advisory firm in New Canaan, Conn.

Volume was relatively light.

The August crude futures contract on the New York Mercantile Exchange ended 3 cents higher to close at $70.87 a barrel after rising as high as $71.30 a barrel.

Petroleum products ended mixed.

July gasoline futures rose 95 points to $2.1275 a gallon. July heating oil finished at $1.9626 a gallon, down 92 points.

Final settlement prices weren’t in yet.

For the week, crude finished a little more than $1 a barrel higher.

The gain was mostly driven by the rally in gasoline futures, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.

“If it hadn’t been for the situation with the blocked channel we would not have had this rally and crude would have flat or slightly lower,” Ritterbusch said.

The nearly 15-cent rally in gasoline futures started Wednesday after the federal Energy Information Administration reported a smaller than expected build in gasoline stocks. That, combined with the closure of the Louisiana waterway, sparked a strong rally later in the week.

Twenty-nine ships were waiting to exit or enter the waterway Friday and refineries owned by ConocoPhillips (COP)(250,000 b/d), Citgo (425,000 b/d), Calcasieu Refining (85,000 b/d) and Pelican Refining (15,000 b/d) had acknowledged curtailed production because of the blocked supply route.

U.S. Secretary Samuel Bodman previously said his department stood ready to tap the nation’s strategic petroleum reserves to alleviate any supply shortages, but a department spokesman Friday said no loans of oil to the affected refineries have yet been approved.

The refinery disruption didn’t seem very serious, “but we’re in a supply chain situation where even the slightest problems are magnified, said John Kilduff, senior vice president for risk management at Fimat USA. “The market is hypersensitive to even the slightest refinery slowdown” or supply snag.

By Jonathan Keehner, Dow Jones Newswires