Reuters: Obama Administration to Issue New Drilling Moratorium (BP, CVX, RDSA)
According to Reuters, the Obama administration is preparing to issue a new offshore drilling moratorium. The announcement comes after a U.S. judge ruled that President Obama's six-month drilling shutdown was too broad and arbitrary.
The Obama administration, facing increasing pressure to crack down on the Gulf oil spill, is moving quickly to counter the ruling. U.S. Interior Secretary Kenneth Salazar said in a statement: "I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities."
Despite polls that say the majority of American citizens favor offshore drilling, Obama officials are working to ensure that other rigs aren't facing similar risks to BP's (NYSE: BP) Deepwater Horizon. The administration is planning to appeal the judge's ruling and issue a new moratorium saying that further measures are needed to ensure drilling is safe.
The judge's ruling was welcome news for energy producers like BP, Chevron (NYSE: CVX) and Royal Dutch Shell (NYSE: RDSA). Despite an initial jump in energy stocks, the sector declined over 1%. Investors will continue to keep a close eye on whether idle rigs can begin production again.
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