The situation could have ripple effects worldwide if the Suez Canal becomes jeopardized or even shut down. According to Canaccord Genuity, “this may be impactful as approximately 1.8 million bb/d of oil was transported through the Suez Canal in 2009. A closure of the canal would result in an extra 6,000 miles of travel for any oil being transported out of the region, an additional cost which could drive up oil prices.” International oil prices are already racing towards the $100 a barrel mark. Brent crude oil contracts for March, “the global benchmark,” hit their highest level since late 2008 at $99.63 per barrel on January 28. West Texas Intermediate March futures were up 4.2% to $89.21.
Friday, January 28, 2011
Suez closure fears send oil prices rising
Helicopter Ben's fiat money-printing machine has nothing on 30-years of seething discontent (or more, if you include the disastrous Nassar and Sadat regimes) when it comes to driving oil prices higher. Agustino Fontvecchia writes at the Forbes blog:
Posted by Editor at 8:57 PM