Mon 7 Aug 2006
While the mainstream press will attribute any and all single-day price changes in the market at large to the prevailing news that day, most of the time the news is not actually that significant in moving the markets.
And then there is the exception. Today, “oil jumped above $77 a barrel after BP began shutting down the biggest oilfield in the United States. The UK oil giant acted after discovering a damaged pipeline at Alaksa’s Prudhoe Bay.” (Reuters)
The $1.85 per barrel constitutes a 3% move before 7am… Total output from Prudhoe is just less than 1 million barrels per day, so if the entire production is shut down, that’s significant in terms of worldwide supply.
August 8th, 2006 at 9:35 am
Correction – the Prudhoe Bay produces closer to 400,000 barrels a day, not the 1 million/day that I originally said. Despite having half as much throughput as I thought, it’s still the largest oil producing field in the US.