Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
The southern pipeline had holes drilled into it, apparently in order to steal crude. The northern pipeline was damaged by an explosion, likely an insurgent attack. And an oil security officer was assassinated.
I guess this explains why the price of light sweet crude shot up almost $2 yesterday...
Partly. The main reason for the price increase was the EIA/DOE weekly petroleum status report Wednesday (available on their website). The crude oil reserves of the US have fallen unexpectedly (again). The inventories of some oil products are reaching critical levels increasing the risk of fuel shortages later this year.
Moreover the US domestic production has fallen by 4.5% since last year, increasing the dependence on foreign oil (~65%). Since the production of the UK and Norway is dropping very rapidly, an ever-increasing amount of this oil coming from unstable regions.
So you have a very tight market and a narrow margin for supply disruptions. At the same time the risk of such supply disruption is very large due to the unrest in various parts of the world (Iraq, SA, Nigeria, Venezuela, Russia). This adds to the price.
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