U.S. Loses 8% of Oil Production Over Night
August 7th, 2006 by Grant in: Oil & GasOil prices didn’t require an ignition source this morning, they just spontaneously combusted on news that BP had shut down a major pipeline in Alaska due to corrosion problems.
Crude prices for the September contract were up $1.54 as BP (BP: chart, web) said they had shut down the Prudehoe Bay field after finding corrosion and a small leak, putting a halt to 400,000 barrels of crude for each day it remains shut in.
The government has said it doesn’t see a problem tapping into the strategic petroleum reserve (SPR: wiki) as storage levels are high enough to cope with the problem for some time. In addition, they aren’t forecasting any gasoline shortages, although you can be sure you’ll feel the effect of this at the pump.
This just goes to show how delicate the oil market is right now.
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August 10th, 2006 at 12:22 pm
Of course the gov’t doesnt see a problem tapping the spr. What ever georgie can do to spike the price of oil for his commrades down in texas. sheesh.
August 11th, 2006 at 9:31 am
I think you and I probably disagree on the fundamentals of how the oil markets work.
In addition, if the President doesn’t release supply from the SPR, and supply dries up at the pump, you can be sure that the price of oil WILL spike. It’s really a double edged sword.
Keep reading, I’ll have some more posts on the oil markets in the future.
-Grant