Lynne Kiesling
Two big factors contribute to the persistence of high oil prices. First is labor unrest in both Nigeria and Norway, as this Telegraph article explains. Norwegian strikers are protesting poor working conditions, Nigerian rebels are disrupting production and transportation there. Both Norway and Nigeria produce light sweet crude, which has low sulfur content. The oil that Saudi Arabia has available for sale is heavier crude, with more sulfur. There are refineries in the US that can process light sweet crude, but not heavier crude, so the Saudi production is not a perfect substitute for the Nigerian and Norwegian.
Second, hurricanes in the Gulf of Mexico damaged rigs and pipelines sufficiently that it will take over a month for some of them to come back online. Furthermore, those same hurricanes damaged some natural gas pipelines, so already-high natural gas prices are starting to rise more dramatically.
Did you really type “continue to persist” with a straight face? I was hoping for a punchline.
Endeavour to Persevere.
Andrew,
Smart aleck! That’s what I get for working too early in the AM.
Rick,
I think the point is that because of the unfortunate concatenation of disruptions, even though N+N have relatively small capacity, their disruptions are having an effect on prices.
The phrase “Continue to persist” gets nearly 10,000 hits in a regular Google search.
Whether or not recommended for ordinary prose, we can expect use of the phrase to continue to persist.
Clayton Cramer floats an interesting theory: George Soros is deliberately manipulating the oil market to hurt Bush in the election.