[blukatzen]

This is from my husband, who works very near this Oil refinery in Romeoville, IL, a far-flung suburb of Chicago. The noxious odors were rampant in the air yesterday, fire marshall around, etc.

"In this age of peak-oil, world-wide oil supplies are that tight.
Last night the EPA said that the local spill was in the neighborhood of 1,000,000 gallons. But it is the pipeline shut down that has raised prices world wide.
This was also reported on WBBM AM news radio 78.
The quote below is from the Associated Press article.
“Oil climbs to near $76 a barrel in Europe on US pipeline shutdown …..A pipeline transporting 670,000 barrels of oil a day was shut Thursday in Illinois due to a leak. No injuries were reported and authorities said they have yet to determine what caused the leak.
The pipeline is owned by Enbridge Energy Partners, an affiliate of Enbridge Inc., based in Calgary , Canada .”

Edward A. Anderson II

Here's the link to the story on yahoo:
http://finance.yahoo.com/news/Oil-price-surges-after-apf-2718020735.html?x=0&.v=1

[Outcast_Searcher]

I think pundits constantly try to state reasons that commodities and stock markets move in the short term, but they may easily be wrong.

To me, it might make plenty of sense for such an event to skew things like gasoline prices in the U.S. over fear of shortages. Possibly also various grades of crude might have prices skewed, depending on U.S. refinery constraints, etc. But EUROPE? The U.S. is a huge net importer of crude.

Oh, and I have been reading numerous little articles about how we are AWASH in crude oil in storage, how if it weren't for mean old crude investors, crude prices would tank, yadda yadda. Even though the net "glut" is less than a day of global demand.

Unless this pipeline issue goes on a long time or does significant environmental damage, I don't see why it is much of a U.S. story. Unless it goes on a LONG time, I sure don't see why it is a global crude price moving story of any significance.

[dolanbaker]

One of the main drivers of oil prices these days is Chinese consumption, Obama's new stimulus package also raised expectations of rising demand. Anyway a 2.5% rise in crude prices is nothing unusual, it often rises or falls a couple of percent in a day, it's just market instability.

[pup55]

The line was shut at 12:45 p.m. yesterday by the company after a leak was discovered. The rate of release was 50 gallons per minute, according to a filing with the Illinois Emergency Management Agency. Romeoville is about.

The Lemont refinery will seek other sources of crude to minimize disruptions until the situation is resolved, the company said in an e-mailed statement. The plant is operating at reduced rates due to planned maintenance.

In addition to Citgo’s refinery, ConocoPhillips’ Wood River plant and Exxon Mobil Corp.’s Joliet refinery, all in Illinois, along with BP Plc’s Whiting plant in Indiana, are located in the vicinity of the pipeline.

The four refineries can process about 1.22 million barrels a day, almost half of the refinery capacity in states that comprise the Midwest refining region known as PADD 2 and about 7 percent of overall U.S. capacity, according to data compiled by Bloomberg.

http://www.bloomberg.com/news/2010-09-10/enbridge-illinois-pipeline-leak-pushes-crude-gasoline-higher.html?cmpid=yhoo

Enbridge is the same outfit that had the oil spill in Michigan a couple of weeks ago.

There is quite a bit of difference between 1 million gallons and 50 gallons per minute.....but in the age of conflicting and obfuscating measurements there is going to be some question.

As to the impact: these pipelines are relatively easy to fix, I believe we have had a number of instances in the last couple of years of pipelines literally blowing up and only being down a day or two....

There are several pipelines serving this region...there are also usually big storage facilities at each refinery for just such an event.

I think this would have to go on for a long time before it had any serious long term impact. Short term, though, it points out how panicky people can get over the slightest bit of news on this stuff....