This potential 'black swan' for US oil prices is being overlooked, a trader says - unreliable electricity grids

There is a chance that electricity grid problems in the US will cause havoc in energy markets.

Failing power grids and electricity shortages are seen by an energy trader as the next vulnerability in the supply chain for oil and its products.

It's possible that those under the surface risks are being overlooked and that they could be a black swan. Kelly noted that power is needed to make oil.

She said that a failing power grid could be the next problem.

Problems with power grids in the US and other countries could cause chaos in energy markets.

Kelly said that the reliability of the US electricity grid is being overlooked. As the industry shifts from fossil fuels to clean energy sources, it's under pressure.

She pointed to the impact of a rare winter storm in Texas in January of 2021. The domino effect of ERCOT power grid failures wreaked havoc on operations in the state.

According to the US Energy Information Administration, Texas is the largest oil-production state in the US.

A power grid failure larger than the one we saw in Texas could be catastrophic.

Natural gas and oil prices could be affected by power failures due to heat, storms or some other unforeseen event, if the aftermath from Texas is any indication.

Predicting or sounding alarms is not something we are doing. It will not matter until it does.

Concerns are mounting about US power grids ability to cope with peak summer demand as the clean energy shift moves forward without having the technology in place to keep them resilient

The reliability of the US electricity grid has been warned about by the North American Electric Reliability Corp.

The authors of the report said that Russian attackers may be planning or attempting malicious cyber activity to gain access and disrupt the electric grid in North America.

The risk of insufficient operating reserves is high in the west and central US.

An above-normal Atlantic Hurricane season is predicted for the US this year, which could affect power demand in Texas. The daily power burn in the region dropped when storms hit.

Kelly said that the markets for oil, gasoline and natural gas are already squeezed by the sanctions against the Ukranian government. There is a chance of a break in the reliability of electricity.

There have been no issues at the last stop on the chain. The supply chain is vulnerable regardless.