Oil Prices Close Higher After Volatile Day
NEW YORK (AP) _ Reports of unrest in Panama and Nicaragua set off sharp fluctuations in crude oil prices, but near-term futures contracts managed a moderate gain by the close of trading.
On the New York Mercantile Exchange, contracts for April delivery of West Texas Intermediate, the benchmark U.S. crude, rose 32 cents to settle at $16.00 per barrel on Wednesday.
Among refined products traded on the exchange, wholesale gasoline for April delivery rose 0.86 cent to 45.24 cents per gallon and the April contract for wholesale heating oil gained 0.61 cent to close at 44.08 cents per gallon.
The April price of crude jumped as high as $16.18 a barrel and sank as low as $15.75 during the session amid reports of an attempted coup in Panama and of a Nicaraguan attack on Contra rebels in Honduras.
Traders were concerned about a disruption in oil supplies because of the vulnerability of an oil pipeline that runs through Panama from the Atlantic to the Pacific, said Madison Galbraith, senior energy specialist with Merrill Lynch Energy Futures.
As the reports crossed news wires, prices spurted upward, Galbraith said. Prices later fell back as calm and sellers returned to the trading floor.
Galbraith attributed some of Wednesday’s price fluctuations to technical factors, including covering of short sales.
In a short sale, a trader borrows a contract and sells it, hoping to replace it later with another contract bought at a lower price. A price rise can cause a flurry of buying as traders attempt to cover their positions.