Oil reaches $100/barrel, Gulf of Mexico drilling starts

US President Barack Obama has approved the first permit for deepwater oil drilling in the Gulf of Mexico after a nine-month shutdown following the April 2010 explosion of the Deepwater Horizon oil rig and the major spill that followed. The moratorium was lifted in October, but the US administration has played it safe and taken time before issuing permits. The permit issued MOnday 28 February went to Noble Energy of Houston, for an existing well.

The news comes as the price of oil reached $100 per barrel Tuesday 1 March, with tensions in oil-producing Middle East states, notably Libya, continuing. The CS Monitor reports that in the US, truckers are unhappy but some oil producing areas such as North Dakota, see the higher prices as a bonanza because it allows them to extract oil from sites where the recovery cost is relatively high.

Trading on call options of oil drilling equipment and services company Weatherford International, based in Geneva, were the highest on the US market Tuesday, reports Bloomberg, following news of the permit.

Links to other sites: Bloomberg, CS Monitor, Houston Chronicle