Investing.Com - 3 Regional Oil Supply Disruptions That Could Also Impact Prices

January 17, 2018 – Investing.Com

3 Regional Oil Supply Disruptions That Could Also Impact Prices

By: Ellen R. Wald, Ph.D.

While most oil traders focus on the big three producers of our day—Saudi Arabia, Russia and U.S. shale—we shouldn't ignore struggling producers. Missing supply from Mexico, Iran and Venezuela will also affect the market and prices, after all.

Here are some updates:

1. Mexico

Mexico’s gasoline crisis caused a huge build in gasoline stocks in the United States this week. Mexico cannot produce enough gasoline to meet demand. To compensate, it has been importing gasoline from the U.S. In fact, Mexico is the largest importer of U.S. gasoline.

The problem right now is that Mexico has shut down several key pipelines in order to stop rampant theft. According to the Mexican government, $3 billion worth of petroleum products were siphoned off from pipelines and stolen from refineries last year. These pipelines also carry petroleum products imported from the U.S. and the shutdown has led to a backlog of ships stuck at Mexican ports unable to unload their gasoline cargoes. We are now seeing the impact of this in the weekly EIA data released on Wednesday, which showed a major gasoline build.

If the backlog in Mexico continues, it could impact refinery runs in the U.S. and spill over into U.S. crude oil stocks. (For an in-depth look at the origins of the gasoline and theft issue in Mexico, take a look at this piece from RBN Energy)....

Read the full article here: https://www.investing.com/analysis/when-it-comes-to-oil-prices-missing-barrels-matter-too-200376439