BP Shutdown Puts Pressure on Gas Prices

#1

Published - Aug 08 2006 7:36AM CDT || AP

By MARY PEMBERTON - Associated Press Writer

ANCHORAGE, Alaska(AP) The fast rise in oil prices after BP's announcement that it was shutting down one of its biggest oil fields for repairs that could take months appeared to have leveled off Tuesday morning.

Oil prices fell in several markets, but the price was still more than $1 above last week, putting pressure on prices at the pump.

Light sweet crude for September delivery on the New York Mercantile Exchange slipped 33 cents to $76.65 a barrel in electronic trading by midday in Europe. September Brent at London's ICE Futures exchange fell 40 cents to $77.90 a barrel.

BP said it discovered corrosion so severe that it will have to replace 16 miles of pipeline at the huge Prudhoe Bay oil field. The news Monday put pressure on prices at the pump during the peak summer driving season and prompted the government to consider dipping into its emergency stockpile.

Most of the crude oil produced out of Alaska's North Slope each day goes to refineries in Washington, California and Hawaii, said Joe Sparano, president of the Western States Petroleum Association, a trade group based in Sacramento, Calif.

Sparano said it's too soon to tell how the shutdown will ultimately affect consumers. "Until we know the full extent of any necessary repairs and how long they might take, it's impossible to predict what the impact might be," he said.

The average U.S. retail price of a gallon of unleaded, regular gasoline was $3.036 on Monday _ near its all-time high of $3.057, reached Sept. 5 after Hurricane Katrina hit the Gulf Coast. Gasoline futures also rose, indicating the market expects further increases.

The Energy Department said it is prepared to provide oil from the government's emergency supplies if a refinery requests it. "If there is a request for oil we'll certainly take a serious look at that," spokesman Craig Stevens said.

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Bot · #2

Shitty deal for us... not much we can do, though. If it's broke, then it needs to be fixed.

#3

$3 + /sad.gif" style="vertical-align:middle" emoid=":(" border="0" alt="sad.gif" />

#4

QUOTEIf it's broke, then it needs to be fixed.

After all, if they say it's broke, it must be broke. :shock:

#5

we made bank because i anticipated this, and I got a permanent position for predicting this (they are even paying for alot of my college)!!! This lets us keep our electricity reasonable, and all but guarantees us a solid Third Quarter in 2006.

hahahaha Can you say Christmas bonus... when it pays off,.. because people who are not leveraged will not be able to run reliably, without a high risk margin in the works.

And we DID NOT manipulate market, nor gouge service providers in ways that will set higher power bills for direct consumers...

right before this was announced, we dropped one plant off line, bought the largest wind energy in the US with the recouped operative cost collateral, and used the tax break on the purchase to convert the plant off of oil, and onto NG, so we can feed it into California, where most of this oil goes. Instead, it is running off of Canadian NG, and we can even burn it straight off the pipe!

so, even though gas prices might spike a bit, your power bill should not do so nearly as much... unless you got a straight oil plant and live on the west coast, in like Oregon. hehe.

and yeah, I still have to pay 3.25 for gas. these pipes go to the west (8% of US production), gas out there will hit bottom without a buffer, and companies will move gas there to sell it at higher cost.

Bot · #6

QUOTE(RIMFIRE)QUOTE If it's broke, then it needs to be fixed.

After all, if they say it's broke, it must be broke. :shock:

Well, I like to trust that they know what they're talking about... if not, god help us all! lol

Bot · #7

BP oil field 'closed until 2007'

January 2007 is when they're predicting it'll be up and running again...