Oil prices climbed above $86 today as the government reported the U.S. economy expanded in the first quarter and on growing concern that an oil spill in the Gulf of Mexico will affect supply, according to AP. Oil rose 91 cents to $86.08 per barrel in midday trading on the New York Mercantile Exchange. Crude has moved between $81 and $87 this month as traders weighed the improving global economy against stubbornly high U.S. oil inventories. On Friday, the Commerce Department said the U.S. economy grew by 3.2 percent from January to March. It was the biggest improvement in consumer spending in three years. That's good news for the oil and gas industry, which has seen demand for energy tank with the economy. As the economy picks up steam, factories and businesses should use more power and consumers more gasoline. The disadvantage for the energy sector Friday continued to be the huge oil spill in the Gulf of Mexico. About 5,000 barrels of oil per day are leaking from the seabed where the drill ship Deepwater Horizon exploded and sank. A giant slick is approaching the Gulf Coast. A top adviser to President Barack Obama said Friday that no new oil drilling will be authorized until more is known about what caused the growing calamity. JP Morgan analysts wrote in a note to investors that the spill raises worries about supply. «Given the rich concentration of both offshore upstream assets and refining and petrochemical plants along the Gulf Coast, markets are increasingly concerned about the potential for restriction of vessel movements to tighten crude and product markets.» For now, traffic through the Southwest Pass, the main deep water shipping lane in the area, has not been restricted. It appeared that the Louisiana Offshore Oil Port, or LOOP, a key facility for offloading tankers delivering U.S. oil imports, would not be affected, according to analyst Olivier Jakob of Petromatrix. «Ultimately, if there are any disruptions to crude oil imports, the Strategic Petroleum Reserves will be released,» Jakob said. The SPR totaled 726 million barrels in December, according to the Department of Energy. That is around 75 days of oil imports. In other Nymex trading in May contracts, heating oil rose 2.87 cents to $2.2799 a gallon, and gasoline gained 1.94 cents at $2.3750 a gallon. Both contracts expire Friday. In London, Brent crude rose 27 cents to $87.17 on the ICE futures exchange.
