Russian pipeline leak causes oil price spike
As global oil production nears its peak and developing countries just keep developing, the tension between supply and demand has become so taut that the slightest perturbation can wreak havoc. Exhibit A: this weekend, a Russian pipeline to central and Eastern Europe sprung a leak near the border of Belarus, temporarily shutting down a route that supplies an eighth of Europe’s imported oil. Estimates of the amount of oil spilled ranged from about 550 gallons to 11,000; the pipeline resumed function yesterday. The incident was nothing out of the ordinary — Russian pipelines leak about once a month, according to the Russian branch of Greenpeace. But news of the leak instantly cranked oil prices up to $74.04 a barrel. As the relatively small impact was reported, prices then dropped. Says market analyst Rick Mueller, “This was an impressive move on a rather small event, which just shows that it doesn’t take much to move the market.” Fasten your seatbelts!