Because of severe corrosion in one of the pipelines, BP is temporarily closing the production from the Prudhoe Bay oilfield, and, in the process, cutting off some 400,000 barrels of oil a day, some 8% of US production. The NYT story suggests that this might raise prices by as much as $10 a barrel.

ANCHORAGE, Alaska - In a sudden blow to the nation's oil supply, half the production on Alaska's North Slope was being shut down Sunday after BP Exploration Alaska, Inc. discovered severe corrosion in a Prudhoe Bay oil transit line.

BP officials said they didn't know how long the Prudhoe Bay field would be off line. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.

Once the field is shut down, in a process expected to take days, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production as of May 2006 or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

and then let's not forget:

OPEC production down in July 0.8%.

Tomorrow will be an interesting day. More under the fold.

UPDATE: From Rigzone

The Department of Energy Monday said it would consider offering refiners oil from the nation's emergency oil stockpile to address supply concerns in Alaska resulting from BP's shutdown of Alaska's Prudhoe Bay field.