Olivia Woods
After last night’s oil spill, the Canadian company TC Energy Corp. said that the Keystone pipeline was shut down due to “force majeure.”
Over 600,000 barrels of oil per day were being transported through the pipeline from Canada to U.S. markets before it was shut down on Wednesday night.
Prices for West Texas Intermediate crude oil futures increased briefly above US$75 per barrel. As a result of the shutdown, fears of a shortage in physical crude caused prices to spike on the Gulf Coast.
An extended disruption would reduce oil supplies in the U.S. futures delivery point in Cushing, Oklahoma. Refineries increased processing in response to high gasoline demand, reducing hub inventories to multi-year lows.
The Keystone pipeline starts in Western Canada and continues into Nebraska before branching. Two branches split off from the main line; one goes east to Illinois, and the other travels south through Oklahoma and onto America’s refining powerhouse on the Texas Gulf Coast.
The leak comes as no surprise given that the company has been troubled by spills for years. In October 2019, the pipeline was also shut down after thousands of barrels of oil spilled in North Dakota.
In Nebraska, the Department of Environment and Energy has determined that the incident took place in Kansas. On Wednesday, federal regulators from the Pipeline and Hazardous Materials Safety Administration were sent to the scene of an oil leak in Washington, Kansas.
“PHMSA’s investigation of the cause of the leak is ongoing,” the agency said.
Original source material for this article taken from here
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