Oil rises to near $90 in Europe as traders eye repairs on damanged Alaska crude pipeline. Oil prices rose to near $90 a barrel Tuesday as traders eyed repairs on a shutdown Alaskan pipeline that has cut crude production in the state.
By early afternoon in Europe, benchmark oil for February delivery was up 55 cents to $89.80 a barrel in electronic trading on the New York Mercantile Exchange.
The contract climbed $1.22 to settle at $89.25 on Monday on news a 800-mile (1,300-kilometer) trans-Alaska pipeline, which normally carries between 620,000 barrels a day, was shut Saturday after a leak was discovered at a North Slope pump station. Oil production on the North Slope was cut by 95 percent.
Alyeska Pipeline Service Co., which operates the pipeline from Prudhoe Bay, said Monday it had welders working around the clock on a bypass line to circumvent the leak and restore the flow of oil, though no restart date was given.
“If the pipeline is not returned to service rather soon, the impact on West Coast refineries will eventually become acute,” Cameron Hanover said in a report. “The assumption is that the pipeline will be fixed quickly. Once we know how long it will take to fix, most of the buying will be over.”
The market will also be watching the release of U.S. inventory data, which does not yet include the effects of the pipeline disruption.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department’s Energy Information Administration — the market benchmark — will be out on Wednesday.
Data for the week ending Jan. 7 is expected to show draws of 300,000 barrels in crude oil stocks and a rise of 2.9 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
In other Nymex trading in February contracts, heating oil advanced 1.24 cents to $2.5685 a gallon while gasoline futures fell 0.27 cent to $2.4516 per gallon. February natural gas futures slid 0.9 cent to $4.39 per 1,000 cubic feet.
In London, Brent crude was up 56 cents to $96.26 a barrel on the ICE Futures exchange.