Brought over from the old site - 8/8//06

I was listening to the news, this morning, and heard that BP lost a fair chunk of its supply because of a corroded section of pipeline. Apparently it may take up to three months to repair.

It will be interesting to see, over those months, if BP's direct costs (buying oil, shipping it to refineries, etc.) go up. One would expect that the pipeline was being used because it was cost-effective. That being said, one would further expect that (normalizing for the quantity sold, of course) the cost of doing business (raw materials and shipping in particular) will rise and the profit margin will fall during this quarter. Perhaps not massively, but losing a pipeline that supplies 2% of all US oil consumption would certainly make a measurable impact.