April of 2010 brought the worst environmental disaster in U.S. history, with the Deepwater Horizon Oil Spill in the Gulf of Mexico. While the majority of the nation has put the spill behind in the past thanks to the capping of the leak late last year, oil continues to make headlines for all the wrong reasons. Late last week, a leak was detected in the 800 mile Trans-Alaskan Pipeline, forcing British Petroleum (NYSE: BP) -- the largest shareholder of the line -- to temporarily shut down the crucial source of crude oil. Along with a major pipeline currently out of operation, numerous other factors have combined to put oil into focus this week, as crude prices continue to march higher to start the new year [see also Five ETFs Heavily Dependent on China].

The Trans-Alaska pipeline transports oil from the Prudhoe Bay oilfield to Valdex and on to the continental U.S. It represents one of the nation's most important sources of the fuel, carrying around 12% of our total output as a country. Upon the release of the news of the leak, crude prices jumped as a major supply bottleneck was suddenly created. This, along with a government report that investigated the Deepwater spill, helped to push oil above the $91 per barrel mark yesterday, within striking distance of its 52-week high [see also Inside Five Surging Commodity ETFs].

But the issues with this major pipeline are not the only thing that is built into the current price of oil. Winter storms continue to batter the east coast, as the third major storm system in three weeks is threatening the Northeast. With adverse winter weather conditions, heating oil prices have shot up, as the demand continues to increase from New York City and the East Coast.

Oil prices have also been moving parallel to news out of the eurozone as of late. Whenever there is good news from the debt-stricken European nations, oil prices surge, but bad news sends prices plummeting. Japan's recent promise to buy bonds from the highly indebted nations of Europe helped to create strong tailwinds for the oil industry and euro-zone alike [see also Ten Commandments of ETF Investing].

With all of these factors lining up, and a crucial EIA petroleum status report due out later, today's ETF to watch will be the United States Oil Fund (NYSE: USO). The commodity fund tracks light, sweet crude oil, and the investment objective of USO is to reflect the change in percentage terms of light, sweet crude oil futures on the New York Mercantile Exchange. If no good news comes from the Alaskan pipeline situation and if the large winter storm hits the East, expect oil to experience another strong day, but if the pipeline's flow is restored, or the eurozone outlook is downgraded, USO will endure a rough trading day, capping its recent rally.

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Disclosure: Photo courtesy of Luca Galuzzi. Long BP

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