Materials Risk explains: How do pipeline shutdowns affect energy markets?

On the morning of 9th September a leak was discovered on a pipeline carrying gasoline in Alabama. The Colonial Pipeline carries 1.3 million barrels per day of gasoline from refineries in Houston to be distributed across the South East and eastern seaboard, all in all accounting for up to 40% of the regions gasoline supply. The authorities first concern is the potential environmental impact – on the local water supply and wildlife. Markets of course react immediately to facts and speculation as to the potential impact on supply as well as demand.

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Fools platinum?

According to The World Platinum Investment Council (WPIC) now is a good time to invest in platinum…well I guess they would say that. So what is the reason for why the WPIC (backed by platinum miners to promote the use of platinum) is so positive on the outlook for the metal right now?

As the FT reports “This is only the fourth period in … 40 years where platinum is at a sustained discount to gold. Investors are increasingly telling us that they view this divergence from historical norms as significant and temporary,” the council said.

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Why I am a convert to technical analysis of commodity markets

“Fundamentalists that don’t pay attention to the charts are like a doctor who says he’s not going to take a patient’s temperature.” – Bruce Kovner

Up until relatively recently I was like that doctor who never checked the patients temperature.

I shuddered at the thought of names such as ‘Inverse Head and Shoulders’, ‘Double Bottoms’ and ‘Saucers’. I disparaged (albeit privately) the notion that there were resistance and support levels from several years ago that were still relevant today. I winced whenever I heard news outlets discussing the short covering of hedge funds for the reason why one or another commodity prices had rebounded last week.

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