Oil Ends to the Upside

Energy futures were mixed Tuesday, but the April light sweet crude contract, trading for the last time at the New York Mercantile Exchange, advanced.

April oil rose 14 cents to close at $56.73 a barrel. Reformulated gasoline fell a penny to $1.95 a gallon, and heating oil slipped 2 cents to $1.67 a gallon.

Natural gas rose 6 cents to finish at $6.91 per million British thermal units.

On Wednesday, the May crude contract will become the near-term tradable contract at the Nymex. May crude was recently trading at $59.57 a barrel.

Many traders are using gasoline futures prices as a barometer to determine the price direction of other energy futures after gasoline broke the key technical level of $1.95 a gallon on Monday, according to Edward Meir, energy analyst at Man Financial.

Geopolitical tensions concerning Iran's nuclear program appeared to have turned positive for the U.S. after it was reported that Russia is threatening to withhold fuel for Iran's Bushehr power plant unless it halts its uranium enrichment. The mounting tensions with Iran have been putting upward pressure on global oil prices in recent weeks.

In a report released Monday, Merrill Lynch took note of the recent climb in reformulated gasoline futures prices by increasing its target gasoline crack spread for the second quarter of 2007 to $20.20 a barrel from $15.80 a barrel. Crack spreads represent the money a refinery gains by "cracking" a barrel of oil into a derivative product like gasoline.

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