This isnt good, in regard to potential the spill has to impact supply to the US, the last line of the story says: “supply stoppages would have to be expected and this would mean a temporary decline in oil imports and a short-term reduction of stocks…”
Translation, get ready….prices will be forced to rise at the exact same time that the “summer driving season” starts….gas will be $3.50 by the end of this month.
Oil above $86 as traders eye Gulf crude spill
Oil extends gains above $86 in Europe as traders eye Gulf of Mexico crude spill
Oil prices extended gains above $86 a barrel Monday as traders eyed whether a massive crude spill in the Gulf of Mexico would slow imports to the U.S.
By early afternoon in Europe, benchmark crude for June delivery was up 32 cents to $86.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 98 cents to settle at $86.15 on Friday.
Some analysts expect the 30-mile (48-kilometer) oil slick caused by as much as 210,000 gallons (795,000 liters) of crude gushing into the Gulf each day could undermine imports to key Louisiana terminals, helping to lower crude inventories and boost prices.
U.S. authorities have said imports have not yet been affected.
“The potential disruption of oil tanker traffic in the Gulf of Mexico is already having an impact on oil prices.” Goldman Sachs said in a report. “Traffic of oil service boats and oil tankers through the Gulf will likely be slowed.”
Oil is near an 18-month high of $87, last touched in early April.
Investors are also mulling a recent jump of U.S. crude supplies, a sign demand hasn’t rebounded along with the overall economic recovery.
“The past two weeks have brought weak U.S. oil inventory data that puts into question the much stronger macroeconomic data,” Goldman said.
Goldman said it expects prices to rise to $94.50 a barrel in three months and to $99 a year from now.
Oil prices rose Monday despite a stronger dollar — which makes oil costlier for investors in other currencies — and weaker equity markets, factors which usually tend to push crude lower.
The euro fell to $1.3237 Monday from $1.3308 late Friday in New York while the British pound dipped to $1.5261 from $1.5277 and the dollar rose to 94.25 Japanese yen from 93.93 yen.
“Due to the market’s selective perception of events, factors supporting prices are drawing more attention at the moment than adverse news for prices, especially as the oil disaster in the Gulf of Mexico is providing further support,” said a report from Commerzbank in Frankfurt. “Although shipping routes have not been restricted so far, there is still a possibility that the oil slick will affect important shipping routes and oil production in the Gulf of Mexico.”
“If this happens, supply stoppages would have to be expected and this would mean a temporary decline in oil imports and a short-term reduction of stocks,” Commerzbank said.