Oil's Tale of woe

Predicted it: Looney Dunes: Alaskan Oil

"News over the weekend that BP will have to shut down Prudhoe Bay for repairs.
AP: "BP said oil production would be reduced by 400,000 barrels a day, close to 8 percent of U.S. oil production."

If oil doesn't gain at least $5 on this news, my guesss is that it will drop $5-10.
Why?

News of major cut in production should be positive for prices.
If not, this will be evidence that there is plenty of oil either in the market or ready for the market.
This would drive down prices.

Unwinding of speculative positions will further pressure prices."

Now it's news
Oil’s Rout Outpaces Its Advance - New York Times

And speculation (note that this "Hedge" fund appears not to have been hedged):
A Hedge Fund’s Loss Rattles Nerves - New York Times