Oil pipeline shutdown pushes crude prices higher

Crude oil prices were higher Friday after a pipeline that carries Canadian oil to the United States was closed at a point in Illinois due to a leak, with no estimate of how long it could take to fix it and re-start the flow of oil.

The pipeline, which carries 670,000 barrels of oil per day, accounts for 7 percent to 8 percent of all US crude oil imports.

October contracts for West Texas Intermediate crude added $2.17 to $76.42 per barrel in afternoon trade on the New York Mercantile Exchange, while Brent crude was up a much more modest 69 cents to $78.16 per barrel on the ICE Futures Europe exchange in London.

Nymex October gasoline futures were up 3 cents to $1.96 per gallon while October heating oil futures also added 3 cents, to $2.10 per gallon, while October natural gas futures gained 10 cents to $3.87 per million British thermal units.

Analysts said that the gain in natural gas prices had to do with speculation about whether Tropical Depression Igor will strengthen into a hurricane in the Atlantic, how it might affect prices if it does strengthen, and likely had nothing to do with last night’s explosion of a natural gas line belonging to PG&E (NYSE: BCG), which caused a fire that destroyed nearly 40 houses, killed at least 4 people, and injured many more.

As of mid-morning local time the fire had still not been completely doused, and PG&E officials had not been able to get close enough to the pipe to determine what might have caused the explosion and fire.

The retail price of a gallon of regular unleaded gasoline in the United States was up slightly overnight to $2.685 per gallon on average nationally.