Midwest flooding has shut down some pipelines and terminals in the country’s midsection, which may trap more oil in storage and worsen the slide in oil prices.
Bloomberg.com reports that the flooding has already forced Enbridge Inc. to close its Ozark oil pipeline, which carries about 200,000 barrels a day from Cushing, Okla., to Wood River, Illinois. Cushing is a major oil storage center and stockpiles reached record levels of close to 63 million barrels a week ago.
Meanwhile, industry analysts say the floodwaters may eventually make their way down the Mississippi River to the 10 refineries in the Baton Rouge-New Orleans area. Those plants have the capacity to process about 2.5 million barrels a day, or roughly 13 percent of U.S. refining capacity, Andy Lipow, president of Lipow Oil Associates in Houston, told Bloomberg.
“They could see the effects there in several weeks,” Lipow said. “Sometimes, a refinery isn’t flooded, but the ability to move product out or move crude in is impacted and you can’t leave workers in a flood situation.”
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