August 2010 Monthly Average Crude Oil Price: Nearly Unchanged

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The monthly average U.S.-dollar price of West Texas Intermediate crude oil inched up by $0.45 (0.6 percent) in August, to $76.82 per barrel. That price increase coincided with a weaker dollar, the lagged impacts of a jump in consumption of nearly 0.5 million barrels per day (BPD) in June, and despite high (and rising) crude stocks.

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Recent oil-related developments include the following:

• Debate continues to rage about how much oil remains in the Gulf of Mexico in the wake of the BP PLC spill. Most of the oil that leaked from BP's Macondo well between April 20 and July 15 is still beneath the water's surface, five scientists including Samantha Joye, a professor of marine sciences at the University of Georgia in Athens, concluded in a mid-August memo. Charles Hopkinson, another of the five researchers, said plumes of oil dispersed underwater remain a threat. "One major misconception is that oil that has dissolved into water is gone and, therefore, harmless," Hopkins said. "The oil is still out there, and it will likely take years to completely degrade. We are still far from a complete understanding of what its impacts are." Other scientists believe most of the oil has dissipated. "I don't think it's still lurking out there," said Edward Overton, an environmental chemist and professor emeritus at Louisiana State University. "The Gulf is incredible in its resiliency and ability to clean itself up. I think we are going to be flabbergasted by the little amount of damage that has been caused by this spill."
  
  
• The federal judge who overturned the Obama administration's initial six-month moratorium on deepwater oil drilling has rejected the government's bid to have the court challenge thrown out. Government lawyers argued that a lawsuit filed by several offshore service companies over the May 28 moratorium was moot because the Interior Department imposed a new, temporary drilling ban on July 12. But U.S. District Judge Martin Feldman rejected that argument on September 1, saying the second moratorium "arguably fashions no substantial changes" from the first that had been imposed following the massive BP PLC oil spill.
  
  
• In what seems like deja vu, another offshore oil rig has exploded in the Gulf of Mexico, The blast, which was reported mid-morning on September 2, was located about 80 miles south of Vermilion Bay along the central Louisiana coast, and west of the site of the April blast that caused the massive oil spill. Initial reports indicated all 13 crew members from the rig were in the water; one was injured, but there were no deaths. The platform, owned by Mariner Energy, was not extracting crude prior to the fire.