$100 Oil This Week
It hasn’t gotten all that much media coverage yet, but it is looking more and more like Mexico has taken a Katrina-sized hit that has devastated Tabasco. I had to go to The Irish Times for this:
A week of heavy rains over Mexico caused rivers to overflow, drowning at least 80 per cent of the swampy, oil-rich state of Tabasco. Much of the state capital, Villahermosa, looked like New Orleans after Hurricane Katrina, with murky water reaching to second-storey rooftops and desperate people waiting to be rescued.
There has been some mainstream media coverage, but so far the MSM is largely asleep at the wheel. Another story that emphasizes how this disaster has impacted Mexico’s oil industry:
Villahermosa, Mexico (AHN) – Mexican President Felipe Calderon on Friday warned it would take time to rebuild what has been devastated by the non-stop flooding plaguing the country, including the oil industry, which was crippled by the catastrophe.
“The storms have forced the closure of three of Mexico’s main oil ports, preventing almost all exports and halting a fifth of the country’s oil production. It has a strong economic impact” Calderon said in an interview.
The storm did not spare the Bay of Campeche, Mexico’s main oil producing region and home to more than 100 oil platforms. Overall, the region normally exports about 1.7 million barrels of crude daily. Since, most of the production remains shut down, it would mean that Mexico’s output would drop by 2.6 million barrels a day.
Some 800,000 families were displaced as floods submerged Villahermosa, the capital of Tabasco. More than 300,000 people were also trapped in their homes and rescue operations are still underway.
One hundred percent of the crops were destroyed, on top of the multi million worth of properties and belongings of people that were swept away by floods.
“It’s not just the worst natural catastrophe in the state’s history but, I would venture to say, one of the worst in the country’s recent history,” the President said.
Devastating. Where is the press coverage? 100 percent of crops destroyed? It’s a minor issue in comparison to the human tragedy, but this will probably be the catalyst to push oil on past $100 this week. I estimate the probability of that happening now at 85%.