LONDON: US crude oil surged to $76 a barrel on Monday as BP began shutting an Alaskan field that pumps 8 per cent of US crude and anxiety over the Middle East, supplier of almost a third of the world's oil, ran high.
US crude rose 2.5 percent to $76.67, approaching its $78.40 record. At 1430 GMT it was up $1.59 at $76.35. London Brent was up $1.15 at $77.32 on expectations the United States would scour world markets for replacement oil.
BP said on Sunday it was shutting the Prudhoe Bay oilfield in Alaska for repairs, cutting production by 400,000 barrels per day (bpd) after discovering severe corrosion and a tiny spill from a Prudhoe Bay oil transit line.
A BP spokesman said on Monday it would take several days to shut the field adding "beyond that speculation is pointless. The BP field is a sizeable stream. The world is already concerned about supplies and this is just adding to concerns," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
Oil has rallied 25 percent this year with a quarter of Nigeria's output shut by militants, saboteurs playing havoc with Iraq's exports and consumers afraid Iran could halt oil flows to punish opponents of its nuclear programme.
War in Lebanon has added to unease.
Citigroup said the loss of the BP field further cut the volume of spare oil available to the 85 million bpd world market. It assumed Prudhoe Bay's closure could last months.
"We estimate that "effective" spare capacity... was 2 million bpd, it now falls to closer to 1.6 million bpd," the bank said.
The US Energy Department said it would consider loaning oil to refiners from its emergency reserves as it did last year when hurricanes shut a quarter of US crude and fuel output.
OPEC said it was concerned at the closure and declared it would work to ensure there was no supply shortage.
"The Organization will study the situation and react as appropriate," OPEC said in a statement emailed to Reuters.
The International Energy Agency ruled out using its reserves, Executive Director Claude Mandil said in an interview.
