NEW YORK – Gasoline futures jumped on Friday as the largest blackout in North American history closed seven refineries and threatened already thin fuel supplies.
Three U.S. refinery shutdowns, as well as four in Canada, added to concerns about fuel inventories in the United States, the world's largest consumer.
But crude oil prices were tempered by reports of copious flight cancellations and lower industrial output, which is likely to ease demand for oil.
U.S. crude fell four cents to $31.00 in a session the NYMEX limited to three hours. International benchmark Brent crude oil settled down six cents to $28.81 per barrel, while
U.S. gasoline settled 2.3 cents higher to 99.94 cents per gallon, having earlier touched its highest level since the Iraq war.
"In the past, sudden power outages have caused problems for refineries coming back," said Aaron Brady, a petroleum expert at Energy Security Analysis Inc, in Boston.
"But even on top of that, there were already refinery snags going on around the country, and that is is going to keep gasoline firm," he said.
U.S. refineries are key to feeding the country's 10-million-barrel-per-day consumption of gasoline at a time of thin supplies.
U.S. data earlier this week showed commercial stocks of gasoline falling to their lowest level in more than eight months due to thin imports in the season of highest demand from motorists.
However, refinery managers said some of the refineries closed by the interruption were preparing to start operations on Friday afternoon.
Tempering demand for oil, airlines canceled nearly 400 flights destined for stricken U.S. and Canadian airports, and factories closed their doors temporarily.