LONDON, Jan 13, 2011 – Oil prices steadied on Thursday after a recent spike towards 100 dollars following the closure of a key Alaskan pipeline and falling US crude inventories, analysts said.
Brent North Sea crude for delivery in February rose 17 cents to $98.29 a barrel in midday London trade.
New York\’s main contract, light sweet crude for February, fell 23 cents to $91.63.
"Although it looks likely that we will see the price of oil rising to the $100 mark and beyond, there may be considerable resistance to the price being sustained at that level given that recovering economies are still fragile and there is a need to make sure that the oil price doesn\’t slow economic growth," said Rebecca Seabury at UK energy analysts Inenco.
Oil prices rallied for a third straight day on Wednesday, climbing in London to more than two-year highs, as the key Alaskan pipeline remained shut following a weekend leak.
The market also gained support from data showing crude oil stockpiles fell more than expected in the United States, the world\’s biggest oil-consuming nation.
Brent peaked at $98.85 on Wednesday, the highest level since early October 2008.
Prices pushed higher after the US Department of Energy reported American crude stockpiles sank 2.2 million barrels last week. The decline was sharper than expected, suggesting stronger demand.
The 800-mile (1,300-kilometer) Trans-Alaska Pipeline, which carries about 12 percent of US production, was meanwhile shut down after a leak was discovered Saturday.
Alyeska, the pipeline\’s operator, said Tuesday it would restart the pipeline temporarily to prevent the oil and equipment from cold weather damage.
"They restarted it temporarily to make oil flowing so there is no major freeze but it is under its capacity," said Rich Ilczyszyn at Lind-Waldock.
"The market is looking at the pipeline first and then people are looking at the equity market," he said. "If equities keep going higher, oil is going to follow."
Stock markets have risen sharply this week as worries over the eurozone debt crisis have eased and US fourth quarter corporate results have proved supportive overall.