WTI oil trading firm over $89 on Alaska pipeline closure

11 January 2011 11 January 2011

BonTrade

WTI oil futures open today’s trading session firm over $89 a barrel as a leaking Alaskan oil pipeline continues to push US Light oil futures higher.

Latest WTI Oil Price

US Light crude oil futures for February 2011 delivery was trading at $89.29 a barrel, 06.50 GMT this morning on the NYMEX. WTI oil prices climbed $1.22 to settle at $89.25 a barrel at close on Monday.

The pipeline, which carries between 630,000 barrels and 650,000 barrels a day, was shut down Saturday after a leak was reported at a North Slope pump station. The leak has been contained but there is no immediate timeframe for reopening the pipeline, according to Alyeska Pipeline Service Co, which manages the line.

The closure cut oil production on the North Slope to about 5 percent of normal. The pipeline carries 17 percent or less of the US crude oil output.

Refineries that rely on Alaska crude have several weeks of inventories available so prices aren’t expected to top $100 a barrel because of the closure.

“We don’t believe the news as it stands is enough to push crude oil above the $100 barrier. If oil production is reduced to 5 percent until March or April, then we’ll change our mind.” The Schork Report said.

Once a repair schedule has been released, oil prices could ease, added Cameron Hanover energy consultancy in its Monday report.