Building a world of
resilient communities.



Oil price breaks through $54

LONDON (Reuters) - Oil prices have surged to record highs above $54 as a fire at Nigerian export pipeline becomes the latest threat to consumers' efforts to build winter heating fuel inventories.

U.S. crude set a record $54.45 a barrel on Tuesday, marking a sixth successive day of all-time peaks, and by 1:10 p.m. was trading at $54.16, up 52 cents on the day.

In London, Brent crude hit $51.50 a barrel, before retracing to $51.10, up 44 cents.

Prices were bolstered by news that saboteurs had set fire to a major oil pipeline feeding the Bonny export terminal in Nigeria, which exports 500,000 barrels per day (bpd) of crude.

Operator Royal Dutch/Shell said it was diverting supplies to an alternative pipeline and that 20,000 bpd of crude had been shut in. Nigerian crude is prized for its yield of transportation and heating fuels.

Nigeria, OPEC's sixth biggest producer, has managed to keep exports steady despite a series of threats this month, including this week's general strike over fuel prices that is due to continue until Friday.

Oil prices have leapt 66 percent this year as the strongest demand growth in 24 years caught producers by surprise, leaving a tightly stretched global supply system little leeway to deal with outages.

Winter fuel is in short supply around the globe, with end-September European distillate stocks 3.4 percent below last year and kerosene supplies in Japan down 20 percent from 2003.

In the United States, weekly distillate stockpile data out on Thursday is expected to record a fall of one million barrels, a Reuters poll of analysts showed. U.S. heating oil inventories already are at a six percent deficit versus last year.

"The fear is that there will not be enough heating oil and we are already seeing colder weather in the (U.S.) Northeast," said John Brady, a broker with ABN AMRO in New York. "If we get another fall in stocks, it will put further strain on prices."

In London, gas oil futures on Tuesday broke the $500 a tonne barrier for the first time.


Other financial markets increasingly are taking their cue from oil prices, which threaten to dampen economic growth.

"Crude has had a good run, but our interest now is to see what impact the price will start to have on inflation figures," said Emanuele Ravano, head of portfolio management at investment managers PIMCO.

High prices are beginning to slow the world economy and encourage energy saving measures in China, the International Energy Agency said on Tuesday.

The Paris-based IEA cut its forecast for world oil demand growth next year by 320,000 barrels a day to 1.45 million bpd, forecasting global consumption at 83.85 million bpd.

"The cut reflects expectations of slower economic growth and the impact of high oil prices on demand and the economy," said the agency, adviser on energy to 26 industrialised nations.

The projection, in the IEA's monthly oil market report, marks a sharp fall from this year's growth of 2.71 million bpd, the biggest increase in petroleum demand in 24 years.

This year's demand rise has left producers struggling to keep up and magnified the effects of minor production disruptions.

U.S. Gulf of Mexico oilfields are still running low after last month's Hurricane Ivan, with around 475,000 bpd of U.S. Gulf production still out of commission a month after the storm hit.

In Norway, a rig workers strike is expected to widen on Tuesday, forcing the world's third-largest exporter to shut in 55,000 bpd.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


Peak Oil Review: A Midweek Update - 27th Oct 2016

A midweek update. It has been a down week for oil prices with NY futures …

Review: 7 key scenes in Leonardo DiCaprio’s climate film Before the Flood

Before the Flood, a new feature-length documentary presented and produced by …

Transition in Cities  

It is widely assumed that the ongoing migration of rural peoples to …

Peak Oil Review: A Midweek Update - 20th Oct 2016

 A midweek update. This week’s EIA stocks report gave a …

Oil & Money: Tackling Corruption and Climate Change

This week, senior executives of the oil and gas industry will be meeting at …

CCC: UK must Act Now to Secure Zero-Carbon Heat by 2050

UK heating must be virtually zero-carbon by 2050, says the Committee on …

Peak Oil Review - Oct 17, 2016

 A weekly roundup of peak oil news, including: -Quote of the week …