BP To Shut Largest U.S. Oilfield

From AP:

Oil company BP scrambled Monday to assess suspected pipeline corrosion that will shut shipments from the nation's biggest oilfield, removing about 8 percent of daily U.S. crude production and driving oil prices sharply higher.
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The news sent the price of light, sweet crude oil up $1.53 to $74.57 a barrel in electronic trading Monday on the New York Mercantile Exchange.

No knee-jerk reaction, the jump in prices reflects not only uncertainty over the duration of the shutdown, but the sheer magnitude of the Alaskan oilfield.  Whenever supply levels are so drastically altered, a significant price adjustment is inevitable.

Steve Marshall, president of BP Exploration Alaska Inc., said Sunday night that the eastern side of the Prudhoe Bay oilfield would be shut down first, an operation anticipated to take 24 to 36 hours. The company will then move to shut down the west side, a move that could close more than 1,000 Prudhoe Bay wells.

Once the field is shut down, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

Not only that, but this enormous supply reduction would only be replaced two or three times over if ANWR were in full production.

What would that do to prices?