Two major developments in Northern Canada this weekend have set the stage for a spike in oil prices which may reach $110/barrel within weeks. Thursday afternoon a fire at an Alberta Upgrader in the Tar Sands took Canadian Natural Resources plant offline, possibly for months, cutting 110 000 barrels of “synthetic crude. This comes on the heels of another big explosion in Northern Alberta week ago, when a fireball lit up the sky near Swan Hills as a gas pipeline exploded. The Trans-Alaska pipeline has also faced a shutdown this weekend, cutting off 740 000 barrels per day of crude.

The business press is once again raising the specture of speculation – and there is no doubt that speculative investing will once-again drive the price far higher than it “should be”. But what they aren’t mentioning is the recurrent issues of strained demand. Can the world’s economy once-again suffer skyrocketing oil prices? Peak oil is here, and the fireworks are far from over.

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