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Alex Interrupts Regular Production

Bloomberg’s Businessweek reports that tropical storm Alex has further halted the production of crude oil and natural gas in the Gulf of Mexico.

Hurricane Alex has halted about 26 percent of crude-oil production in the Gulf of Mexico and 14 percent of natural-gas output, the U.S. government said.

Seeing as this is the first tropical storm of the season – and it is only June – it would not be unreasonable to expect higher oil prices over the rest of the summer as a result. The fact that a mere tropical storm headings towards Mexico caused this kind of disruption is a frightening indicator. The next tropical storm, particularly if it interferes with the clean-up efforts, may have more serious consequences.

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