Energy Department Warns About Potential for Oil Supply Disruptions
August 4, 2006
• by Staff
WASHINGTON, D.C. --- In its weekly report, the Energy Department's Energy Information Administration (EIA) warned about potential disruptions in August that could cause "suppliers to maintain more oil in inventory, thus keeping prices relatively high."
The report cited a number of factors that could ultimately cause oil prices to rise: This week the Iranian president rejected a United Nations Security Council resolution and insisted his country would continue to enrich uranium, heightening the potential for sanctions. Tropical Storm Chris in the Atlantic Ocean might reach the Gulf of Mexico next week. These events come at a time of fighting in the Mideast and continued production outages in Nigeria. As a result, the potential for supply disruptions this month is a major concern.
"Adding to this temperament is the knowledge that severe storms, even non-hurricane force storms, have often cut power to some refineries during August, causing them to be off-line unexpectedly, thus diminishing the potential to provide more supply as demand peaks," the EIA report noted.
Originally posted on Fleet Financials