There was yet more evidence overnight that the oil market – and therefore our petrol prices – are ridiculously US-centric.

Hurricane
Wilma hitting orange trees instead of oil platforms saw frozen juice
futures jump again, but light sweet crude finished 31 cents lower at
US$60.32 and traded below US$60 for a while. The old story of the
availability of pictures meant there was plenty of Wilma coverage –
even though it turned out to be a rather boring storm by the time it
reached the US.

What’s been largely overlooked, though, is
that a combination of weather and insurgency has meant Iraq – with the
world’s second largest crude reserves – hasn’t been able to export any
oil this week. Did the market care? No. Iraq’s southern ports have been
closed by bad weather while the northern pipelines have been
successfully bombed and mortared. The BBC sums it up.

According
to the BBC, Iraqi oil production was running as high as 1.6 million
barrels a day before the weekend attacks. By coincidence, that’s about
the same amount that the US pumps out of the Gulf of Mexico. Just the
threat of a storm there feeds into higher petrol prices in Australia,
while the reality of Iraqi exports being halted has no impact.

Meanwhile Wilma added to the US insurance industry’s worst year ever for insured natural catastrophes. Marketwatch.com quotes analyst estimates of US$60 billion worth of damage so far.

It
also shows US meteorological officials are as lacking in imagination as
the White House – the number of storms has exhausted their alphabetical
list of regular names, reducing them to naming the storm Alpha.

What, they’ve never heard of Xena, Yvonne or Zara?

Peter Fray

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