meanwhile, in Iraq...

Leanan · News Editor Joined: May 20, 2004 Posts: 4447

A trifecta:

http://www.msnbc.msn.com/id/5441600

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...

smiley · Fission Joined: Apr 16, 2004 Posts: 2105 Location: Europe

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.

Leanan · News Editor Joined: May 20, 2004 Posts: 4447

Yeek. And what's causing today's runup?

We should start a pool, betting on when the price will set a new record high...

Desire · Tar Sands Joined: Jun 20, 2004 Posts: 72

Will that be inflation adjusted or not?