This past Sunday,
The Oklahoma oil is currently storing around 58,5 million barrels of oil. The hub is connected to nearly every corner of the United States, providing WTI crude to the energy market. If there are more serious earthquakes in the future, this could prove highly detrimental to the supply chain.
Oklahoma experienced a similar earthquake with a magnitude of 5.8 back in September of this year, leading to related actions taken. A pattern has begun in Oklahoma pertaining to earthquakes and will likely continue. This could cause long-term issues for oil majors in the region if disruptions are to reoccur this frequently. Earthquakes began occurring in Oklahoma in
For individuals living in this quake filled region of Oklahoma, they should look into insurance policies to financially protect themselves against home damages. The USGS states there have been over 500 induced earthquakes this year alone, all of which greater than a 3 on the Richter scale.
Phillips 66 errs on the side of caution following several earthquakes this past year. They shut down and check their assets regularly to ensure safety. Over the weekend, their stock jumped $1.33 and climbed an additional $3 on Wednesday. Magellan Midstream Partners LP, Kinder Morgan Inc., and Enbridge Inc. all shut down operations as well. All of these companies have grown more than $1 per share aside from Magellan, which has been in a steady decline. Investors should be on the lookout for a pattern between these firms and the earthquakes throughout the state.
Immediately following the earthquake, crude oil futures on the West Texas Instrument benchmark jumped $0.38. The earthquake shutting down the pipelines signals there could be less supply entering the market thus raising the price. Investors should always be aware of earthquakes and other natural disasters because of their notoriety for disrupting oil production and distribution. Speculators should pay close attention to the seismic activity in the Midwest and no crude oil futures will react.
By Michael McDonald of Oilprice.com
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