Crude oil prices spiked by over 2 dollars on Monday after an Alaskan oil field shut down, cutting off 8% of daily U.S. oil production. Brent crude for September on London's ICE futures exchange rose $2.13 to $78.30 a barrel. Light, sweet crude for September delivery on the New York Mercantile Exchange rose by 3%, to settle at US$76.98 a barrel Monday, after peaking at $77.30 earlier in the day. It was the highest settlement price since July 14, when crude settled at a record $77.03 a barrel.
BP Exploration Alaska Inc. began shutting down 400,000 barrels of daily oil production Sunday at Prudhoe Bay, in Alaska's North Slope region, because of severe corrosion on a pipeline that could take even months to repair and restore production. An estimated 90% of the Alaskan production serves refineries on the West Coast.
The latest inventory report has totaled crude oil inventories on the West coast at 55.5 million barrels, well above last year's levels. If those stocks were to dwindle, refiners would need to get additional crude oil shipped from the Gulf Coast, and perhaps Asia. The U.S. government has also offered oil from its Strategic Petroleum Reserve, which has about 700 million barrels in storage on the Gulf Coast, if requested.
08-Aug-06 
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