- Failing US power grids could be the next vulnerability in the supply chain for oil, energy trader Brynne Kelly says.
- Most of western and central US is at high risk of electricity shortfalls or disruption this summer, research has found.
- Problems with power grids are a potential catalyst for chaos in energy markets that are underappreciated, Kelly says.
Electricity grid problems in the US are a potential “black swan” that could wreak havoc in energy markets, according to Cornerstone Futures research director Brynne Kelly.
In an analyst note, the energy trader argues that failing power grids and electricity shortages could be the next vulnerability in the supply chain for oil and its products, such as gasoline.
Those under-the-surface risks are being overlooked, and that makes them a possible “black swan” — an unpredicted event with a severe impact. While crude oil isn’t much used to generate electricity, power itself is needed to make oil, Kelly noted.
“Said another way, a failing power grid COULD BE the next oil chain supply problem,” she said.
“Problems with power grids across the US and other countries are a potential catalyst for chaos in energy markets that are underappreciated.”
The reliability of the US electricity grid is being taken for granted, Kelly said. But it’s under pressure as the industry goes through a mandated shift from fossil fuels to clean energy sources, and with the peak summer demand ahead.
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