America's largest field going offline
Aug. 7 (Bloomberg) -- Crude oil surged above $76 a barrel, recording its biggest gain in two weeks, after BP Plc said it will shut Alaska's Prudhoe Bay field, where 8 percent of U.S. oil is produced.
The closure of the largest oil field in the U.S. because of pipeline corrosion and a leak will cut supplies to West Coast refineries during the country's peak demand for gasoline. ``Shutting down the field will take days to complete,'' BP said today.
``What BP is telling you is a greater problem with the whole of the Alaskan oil infrastructure,'' said Mark Tinker, head of strategy at Execution Ltd. in London.
Crude oil for September delivery rose as much as $1.79, or 2.4 percent, to $76.55 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $76.53 at 11 a.m. in London. Brent crude oil for September settlement gained $1.34, or 1.8 percent, to $77.51 on the ICE Futures exchange in London.
``The discovery of this leak and the unexpected results'' of recent pipeline tests ``have called into question the condition of the oil transit lines at Prudhoe Bay,'' BP America Chairman and President Bob Malone said today.
Some 400,000 barrels a day of production is being shut, BP's spokesman Ronnie Chappell said. A pipeline that leaked four to five barrels of oil was shut down at 6:30 a.m. Alaskan time Sunday, BP said. BP owns 26.36 percent of the Prudhoe Bay field.
``We haven't been told how long it's going to be down for. It's a big field, so it will take days to shut down,'' said Ivor Pether, who helps manage about $15 billion at Royal London Asset Management. ``They absolutely have to'' shut it, he said. ...