Oil prices climb as leak shuts Alaskan pipeline

January 10, 2011 12:00 am
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, LONDON, Jan 10, 2011 – World oil prices rose on Monday as a pipeline spanning Alaska, which carries an estimated 12 percent of US crude output, was shut at the weekend due to a leak.

New York\’s main contract, light sweet crude for February delivery, was up 70 cents at $88.73 a barrel.

Brent North Sea crude for February rose 73 cents to $94.06 in midday London deals.

"News of a leak in the trans-Alaskan pipeline, and its subsequent shut down, lifted prices," said analyst David Hart at Westhouse Securities.

The operator, Alyeska, said its trans-Alaska pipeline remained shut on Sunday after a leak was discovered on Saturday at a pumping station. The pipeline carries between 630,000 and 650,000 barrels of crude a day.

"The pipeline remains shut down today as responders from Alyeska, contractors, and state and federal agencies work toward safely and responsibly returning the pipeline to service," said Alyeska, which is based in Anochorage.

"Oil was discovered in the booster pump basement Saturday morning and as a result the operations control center in Anchorage shut the pipeline down," it said.

The operator said there have been no injuries or environmental damage as a result of the incident.

"Crude is moving towards $90 a barrel (in New York) as there is some uncertainty in the market as to when the pipeline will reopen," said Ong Yi Ling, investment analyst for Philip Futures in Singapore.

Prices fell on Friday as a stronger dollar made the commodity more expensive and a closely-watched US unemployment report fell short of expectations.

The US unemployment rate in December fell sharply to 9.4 percent but at the same time, the economy created 103,000 jobs, much fewer than the 150,000 forecast by analysts. The United States is the world\’s biggest oil-consuming nation.

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