US Oil Prices Jump on NY Fuel Barge Blast

abcnews.go.com Feb. 21

— NEW YORK (Reuters) - U.S. crude oil futures soared more than $1 a barrel early on Friday after a fuel barge caught fire and exploded near an oil storage terminal off New York's Staten Island.

The blast in the Arthur Kill waterway between Staten Island and New Jersey sent plumes of black smoke and flames into the sky and prices on the New York Mercantile Exchange soaring.

NYMEX April crude oil jumped to an intraday high of $35.95 a barrel, surging $1.21 a barrel. By 12:29 p.m. EST, prices had slipped back to $35.44 a barrel, up 70 cents on the day.

Erroneous reports that the blast had hit an oil refinery also strengthened the initial gains. Prices fell back as it emerged that only an oil storage facility was affected.

Law enforcement officials said there were no initial indications the blast had been caused deliberately, but the initial surge came on fears that the explosion may have been not have been an accident, traders said.

The U.S. government has already put the country on the second-highest level of terror threat alert.

Oil prices have already been trading at their highest level for 29 months amid growing fears of war in Iraq, the world's eighth biggest oil exporter. An 11-week strike in Venezuela has further cut down U.S. winter fuel supplies.

Heating oil futures also surged, hitting a session high of $1.12 cents a gallon, a gain of 2.07 cents on the day, before slipping back to $1.106 a gallon.