Oil prices rose, recovering their strength on the blast in a BP Texas plant, although the traders believe that the impact is more psychological than real.

Yesterday May crude oil futures closed at $54.84 a barrel.

"What this should remind us is that the refining industry in this country is so tightly wound that any problem could have ramifications for the entire country," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
A powerful blast on a Texas BP oil refinery, the third-largest in the U.S., that killed fifteen people and injured some 100 sent oil prices sharply higher.

The management of the plant that produces 470,000 barrels per day believes the explosion to have been caused by internal failure as terrorism is ruled out.

The accident sent gasoline prices to an all-time high of $1.6080 a gallon on the New York Mercantile Exchange as the damaged part of the plant was engaged in upgrading gasoline quality. The rest of the refinery is functioning in a normal mode. The facility accounts for three percent of US gasoline supply.

Even after the accident, the rebounding US currency and the strong increase in oil stockpiles kept the prices under last week’s record of $57.60 a barrel. The U.S. Energy Information Administration (EIA) reported on Wednesday that crude oil stocks added 4.1 million barrels to rise to 309.3 million barrels last week, hitting the peak since July 2002.

Still, even with strong inventory buildup, worries persist that the demand from China and other nations where the economy is expanding at record rates, can further support the oil prices.