BP closes pipeline, prices increase

It'll be interesting to see how the public and Congress respond to this news. It'll probably be viewed as yet another chance to push drilling in the Arctic Wildlife Reserve by conservatives and to blame Democrats for opposing it (although the public is opposed as well), but it isn't going to be good news for the GOP with the elections on the way.

Oil prices jumped overnight after the UK energy giant BP was forced to begin a production shutdown at a major field in the US state of Alaska.

The closure process, which is expected to take several days to complete, is likely to reduce oil production by 400,000 barrels a day - equivalent to 8 per cent of oil production in the US.

News of the shutdown, which BP said was due to pipeline corrosion, lifted the price of crude oil for September delivery by around one US dollar to 75.75 US dollars in Asian trading. The market has also been affected by the continuing violence in the Middle East. (. . .)

BP's Alaskan operation is already facing a criminal investigation into an oil spill in which 270,000 gallons of crude leaked into Prudhoe Bay.