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Last Updated:  Friday, 21 February, 2003, 21:47 GMT
Oil price climbs after New York blast
Smoke from the burning oil terminal drifts across New York
Smoke is visible across New York
An explosion at a New York oil terminal briefly sent the price of oil soaring by more than $1 a barrel.

Prices slipped back slightly when it became clear that the incident was unlikely to be linked to terrorism, but still ended more than 2% higher on the day.

A huge fire broke out at a distribution terminal in the New York suburb of Staten Island after a barge carrying propane blew up, according to New York fire officials.

Oil markets have been jittery for weeks at the prospect of war in the Middle East, with oil prices clinging close to two-year highs.

War fears

Terminal owner Exxon Mobil said the blast happened while a barge containing 100,000 barrels of unleaded gasoline was being offloaded.

Within minutes of the blast, April crude had jumped $1.21 to a high for the day of $35.95 a barrel on the New York Mercantile Exchange, or Nymex.

It fell back slightly to end the session 84 cents higher, or 2.4%, at $35.58 a barrel.

The price of the industry's benchmark, Brent crude, shot up to $32.35 per barrel in London, compared with a closing price of $31.56 dollars at the close of the previous session.

It also retreated slightly to close 71 cents higher, or 2.2%, on the previous session at $32.27.

Oil prices are being driven by war nerves, responding to every twist in the United Nations' deliberations on whether to back a war on Iraq led by the United States.

They peaked at $36.80 in New York as Hans Blix, the chief UN weapons inspector, delivered his report to the UN Security Council on 14 February.

A strike in Venezuela has also tightened supplies and pushed up prices.

Another factor driving up prices has been low stocks of heating oil in the US, which has been having a harsh winter.

Terror attack 'unlikely'

New York's fire chief has said that the most likely explanation was a problem as fuel was being unloaded from the barge.

An FBI official in nearby New Jersey, Steve Kodak, has also said early indications suggested that terrorism was unlikely to be the reason for the explosion.

The oil facility is owned by Exxon Mobil, US Coast Guard officials reportedly told Reuters news agency.

The facility sits on the Arthur Kill waterway between Staten Island and the New Jersey shore, in a largely industrial district.

Initial reports that the barge contained propane, used to produce domestic heating oil, sent its price up about 3 cents to touch 73.25 cents a gallon, according to traders at Mont Belvieu, Texas.





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SEE ALSO:
Blast hits New York oil plant
21 Feb 03 |  Americas
US anger at $2 gallon
21 Feb 03 |  Business
Oil approaches Gulf War prices
14 Feb 03 |  Business
Oil prices hit two-year highs
07 Feb 03 |  Business



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