Monday, August 29, 2005

Just when you think you're prepared for the worst ...


I don't know whether to call this irony, really bad timing or just plain universal karma:

Oil prices surged to a record above $70 a barrel before easing Monday as one of the biggest hurricanes in U.S. history churned through the Gulf of Mexico, forcing major oil producers and refiners to shut down operations...

Despite easing, Katrina -- the 11th named storm of what is expected to be an unusually severe season -- threatens to do lasting damage to vital U.S. oil and refining assets in the Gulf of Mexico, further straining an industry that has struggled to keep up with two years of strongly rising oil demand...

The Gulf of Mexico normally pumps about 1.5 million barrels per day (bpd) of U.S. crude, a quarter of domestic output and equivalent to nearly 2 percent of global oil production, similar to the estimated spare capacity left within OPEC.

"We can expect two months of lost production, and coming in the peak-demand period this is the worst possible news," said David Thurtell, strategist at the Commonwealth Bank of Australia

At this point, you have to wonder, what else can go wrong?

2 comments:

Mark Francis said...

This is horrible news as the world was at peak production already, and was having trouble meeting quota.

Hmmmm, there's a lessson in this somewhere...

Stephanie said...

This seems like a self-correcting move in the global warming phonomena. Burning oil causies global warming => global warming causes more severe storms => storms cause lasting damage to oil and refining assets => less available oil reduces global warming.