Oil Prices Reach New Record High
Oil prices hit a new record on Wednesday, extending gains the previous day that followed news BP was halting production at the biggest oilfield in the United States, possibly for months.
London Brent crude rose 35 cents to a new all-time high of $78.65, traders said, a cent higher than Monday’s mid-session peak of $78.64.
European markets have been pulled higher on expectations the United States will draw in more oil imports to make up for the closure of the Prudhoe Bay field in Alaska that pumps 8 percent of U.S. domestic supply.
U.S. crude futures were three cents lower at $76.95 a barrel by 1553 GMT following a three percent rally on Monday.
BP on Sunday began shutting down its 400,000 barrel per day (bpd) Prudhoe Bay oilfield after discovering a corroded pipeline and said it could be weeks or months before production resumed.
The outage added to traders’ concerns about the adequacy of supply in view of violence in the Middle East and prolonged production outages in Nigeria.
It has underlined the vulnerability of the world’s aging oil infrastructure, much of which dates back around 30 years.
“There’s the Iranian nuclear situation, Israeli action in Lebanon and now we’ve got rusting infrastructure,” said analyst David Dugdale of MFC Global Investment Management.