Fuel fire not likely to badly disrupt national supplies

Prices eased somewhat after analysts and traders realized the loss of gas supplies on the barge and thousands of barrels of heating oil at the terminal in Staten Island would pose only a short-term problem for the Northeast.

"This is two million barrels and that's an important size for Staten Island and the region," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. "Heating oil is extremely tight right now in the East. We can't be losing this quantity at this time."

Even though the barge was carrying gas only, the fire damage makes it nearly impossible to retrieve the heating oil from the facility, hurting regional supplies.

"It could have an effect for a couple of weeks, a little more tightness in heating oil," said Tom Kloza, chief oil analyst with the oil price information service.

The national oil market is not likely to suffer as a result of the fire, analysts said.

Still, crude oil for April delivery rose $1.15 to $35.95 a barrel on the New York Mercantile Exchange, after news reports of the fire. It finished the day at $35.58 a barrel, up 84 cents for the day. Earlier, in London trading, Brent crude from the North Sea finished at $32.27, up 71 cents.

The fire broke out as U.S. crude supplies are already at their lowest level since 1975 and crude, gasoline and heating oil inventories are all below what the industry considers essential for smooth operation, the government reported last week.

The United States has not been getting the massive supplies of imported crude oil from Venezuela because of political turmoil and a nationwide strike there that began in December.

Prices also have been sensitive to worries about a war with Iraq and Middle East oil supplies. As a result, analysts said, any news about the oil markets will cause rumbles, regardless of the long-term impact.

Elsewhere on the Nymex, March heating oil contract rose 4.98 cents, or 5 percent, to $1.10 a gallon, while the March unleaded gasoline gained 4.7 cents, or about 5 percent, to trade at $1.01 a gallon. Natural gas for March delivery surged nearly 7 percent, or 44.4 cents, to $6.606 per 1,000 cubic feet.

A fire at an oil refinery, rather than a storage facility, would have had a far greater impact, analysts said. Refineries contain much more oil than terminal facilities, such as the Port Mobil, and they house expensive manufacturing equipment.<