The Associated Press reported that 28 of 634 manned production platforms and three of 51 drilling rigs have been abandoned in the western Gulf of Mexico as a result of tropical storm Alex. According to The Bureau of Ocean Energy Management, Regulation, and Enforcement, the current evacuation has halted one-quarter of the oil production in the GoM and more than 9% of the regions natural gas production. According to API, energy production from the GoM was 1.6 million b/d and 6.4 Bcf of gas as of March 2010. The closures are expected to interrupt production by a factor of 395,878 b/d (24.7% of US oil output in the Gulf). Despite the shortage, oil prices edged to $77/bbl today, which will be its first quarterly drop since 2008. Crude price dropped 12 cents for August delivery to stay at $75.82, according to Reuters. Overall, oil prices have dropped approximately 10% since the end of March. The API has reported that crude inventories fell 3.4 million bbl last week. Additional information from the Energy Information Administration shows that April’s US oil demand exceeded previous estimates by 45,000 b/d. The Associated Press also stated that the ships working on the BP response would remain at sea. With the current stoppage in the western Gulf, prices may not drop for much longer.
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