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Crude oil futures weaken following an unconfirmed report that the 400K bbl/day Seaway Pipeline...

Crude oil futures weaken following an unconfirmed report that the 400K bbl/day Seaway Pipeline has been shut down. Flows from Seaway and other pipelines have been key in drawing down crude from the Midwest hub in recent weeks and sparking a jump in prices. Seaway is a 50-50 JV between operator Enterprise Products Partners (EPD +0.8%) and Enbridge (ENB +1.9%).
Comments (2)
  • rocketman3
    , contributor
    Comments (34) | Send Message
     
    Why would the shutting down of the pipeline weaken future prices? Shutting the ppeline would reduce supply, conversely increasing demand. Isn't that's how the market generally works?
    11 Jul 2013, 04:32 PM Reply Like
  • njolsson
    , contributor
    Comments (26) | Send Message
     
    From the NASDAQ article linked in the Market Current, above, "Phil Flynn, energy analyst at the Price Futures Group, said a shutdown of Seaway would allow crude oil to back up in tanks at Cushing, the delivery point for the New York Mercantile Exchange's futures contract and keep pressure on prices." This means there will be more supply at the delivery point, not less, thus lowering futures prices.
    11 Jul 2013, 05:03 PM Reply Like
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