The U.S. Department of Energy last week issued
one crude oil loan from the Strategic Petroleum reserve to Marathon
Petroleum Co. as gulf operators dealt with the effects of Hurricane
Isaac. The dual effect of the Category 1 storm and the Labor Day holiday
in the United States caused a brief spike in energy prices. More than
80 percent of the production platforms in the Gulf of Mexico closed as a
result of the storm, causing a ripple effect in the market for
petroleum products. Western economies had already expressed concern
about the economic fallout from high energy prices. A recent statement
from the G7, however, and continued growth in the Chinese economy may
suggest there are broader geopolitical concerns at stake than physical
market issues.
The U.S. Treasury Department issued a statement on behalf of the G7 noting the "substantial" economic risks of increasing oil prices. G7 members called on oil-producing economies to add more crude to markets to meet rising demand.
"The current rise in oil prices reflects geopolitical concerns and certain supply disruptions," the statement read.
The Treasury Department said G7 members were ready to call the International Energy Agency to action to ensure markets were flowing. IEA Executive Director Maria van der Hoeven, however, said that energy markets were "well-supplied." Hurricane Katrina in 2005, a much stronger storm, prompted a strategic petroleum release, but by Friday, companies like Exxon Mobil had already started the process of restoring operations in the Gulf of Mexico as the remnants of Isaac moved inland.
Read more: http://oilprice.com/Energy/Oil-Prices/Economy-not-Physical-Markets-Driving-Oil-Prices.html
The U.S. Treasury Department issued a statement on behalf of the G7 noting the "substantial" economic risks of increasing oil prices. G7 members called on oil-producing economies to add more crude to markets to meet rising demand.
"The current rise in oil prices reflects geopolitical concerns and certain supply disruptions," the statement read.
The Treasury Department said G7 members were ready to call the International Energy Agency to action to ensure markets were flowing. IEA Executive Director Maria van der Hoeven, however, said that energy markets were "well-supplied." Hurricane Katrina in 2005, a much stronger storm, prompted a strategic petroleum release, but by Friday, companies like Exxon Mobil had already started the process of restoring operations in the Gulf of Mexico as the remnants of Isaac moved inland.
Read more: http://oilprice.com/Energy/Oil-Prices/Economy-not-Physical-Markets-Driving-Oil-Prices.html
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