Energy futures were slightly higher at the end of Tuesday's trading session at the New York Mercantile Exchange, including a continuation of the ascent of oil.
The May contract for light sweet crude advanced 5 cents to finish at $62.96 a barrel. Heating oil rose a penny to $1.79 a gallon, and reformulated gasoline was up fractionally at $2.07 a gallon.
Natural gas climbed 24 cents to $7.49 per million British thermal unit.
Increased geopolitical tension with Iran fueled the rise in energy commodities. Iran continues to detain 15 British Royal Navy soldiers who were captured while boarding an Iranian cargo vessel last Friday. Iran says the British soldiers were in Iranian waters, but British officials are adamant that the soldiers were in Iraqi waters.
British Prime Minister Tony Blair warned that efforts to retrieve the soldiers would "enter a different phase" if Iran doesn't release them soon. He didn't elaborate on whether he was threatening military action.
If a territorial dispute over the waters separating Iran and Iraq was to erupt, "we could see a rise in shipping and insurance rates if oil tankers become more hesitant to call on Iraqi oil-export terminals which nestle the Iranian border," according to Edward Meir, energy analyst at Man Financial. That would put more upward pressure on oil prices.
Although tensions with Iran lifted energy prices, weakness in U.S. equity markets prevented traders from being too bullish. The
Dow Jones Industrial Average
finished 72 points lower at 12,397.
Energy traders will be paying close attention to new gasoline inventory numbers being released Wednesday by the Energy Information Administration. Gasoline inventory and demand figures have recently been more bullish than analysts were expecting.
Gasoline futures have risen 34% since mid-January, pulling crude futures along with them. "The key question now is if the complex will clear $2.08 resistance and push to $2.30," Meir wrote in an email.
has cut output from its 420,000 barrel-per-day refinery in Whiting, Ind., after a small fire erupted there on Thursday. A 175,000-bpd catalytic cracker, which was supposed to undergo maintenance in early May, is now expected to be operating at reduced rates for four to six weeks.
Energy stocks were mostly lower.
slid fractionally, while
Carrizo Oil & Gas
was upgraded by Keybanc Capital Markets to buy from hold, and its shares climbed 3.1% to $34.12.
BMO Capital Markets downgraded natural gas provider
to market perform from outperform, sending the stock lower by 1.4% at $32.77.