August 26, 2012

Isaac threaten "monster" oil price jump


Brent crude jumped to $115 a barrel last week and petrol costs across much of Europe are now at record levels.
Diesel is above the political pain threshold of $4 a gallon in the US, hence reports circulating last week that the International Energy Agency (IEA) is preparing to release strategic reserves.
Barclays Capital expects a “monster” effect this quarter as the crude market tightens by 2.4m barrels a day (bpd), with little extra supply in sight.
Goldman Sachs said the industry is chronically incapable of meeting global needs. “It is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand,” said its oil guru David Greely.
This is a remarkable state of affairs given the world economy is close to a double-dip slump right now, the latest relapse in our contained global depression.
A further risk to oil production has materialized with Tropical Storm Isaac which now looks set to threaten New Orleans and the Gulf. Weather trackers are predicting an increase in intensity given its size and the storm's predicted paths are set to cross straight through the middle of the Gulf's oil production in a replay of the terrible August of Katrina. All major rig operators are evacuating which leaves output notably down already.
24% of oil and 8,2% of natural gas output has been shut down for tropical storm Isaac and markets will be monitoring the situation closely tomorrow.
During Katrina prices rose by 75c and given tight reserves at this moment the situation could get even worst.
Isaac's predicted path (via NOAA)

[Image of 5-day forecast and coastal areas under a warning or a watch]




goes straight through the oilfields... (source: Forbes)





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