* Officials hope Alaska pipeline can restart this week
* Technicals show US crude rally towards $91 []
* Coming Up: API U.S. weekly oil inventory report; 2130 GMT
(Updates detail, prices, comment)
By Christopher Johnson and Jessica Donati
LONDON, Jan 11 (Reuters) - Oil rose towards $90 per barrel
on Tuesday as a key Alaskan pipeline remained shut, removing
more than half a million barrels per day from the U.S. markets.
The 800-mile (1,280-km) Trans Alaska Pipeline, which carries
oil from Alaska's North Slope, was closed after a leak was
discovered on Saturday, shutting in flows equivalent to 12
percent of U.S. crude output. []
Producers in Alaska's Prudhoe Bay region have cut output by
about 600,000 barrels per day (bpd) to just 5 percent of normal
levels. Officials said on Monday the Alaskan pipeline should
reopen later this week but no clear time-frame has been given.
A bypass line at the affected area would allow the duct's
operator, Alyeska Pipeline Service Co, to restart the system.
Past shutdowns have generally been short-lived, and tanker
shipments from Alaska's Valdez port have not yet been hit.
U.S. crude for February <CLc1> rose 50 cents to $89.75 a
barrel by 1255 GMT, building on gains of $1.22 on Monday.
"There is the possibility the pipeline will resume
operations pretty soon, in fact 3-5 days from now, but if it
doesn't, it will have a strong impact on the market," said
Christophe Barret, global oil analyst at Credit Agricole.
"If the pipeline doesn't restart, the need to find other
sources will impact crude oil prices in the Middle East."
But Edward Meir, senior commodity analyst at brokers MF
Global, said he did not believe the pipeline closure would
"translate into any meaningful disruption" to oil supply as
stockpiles remained "more than adequate".
"Consequently, some of (the) gains could be rolled back
later in the week, particularly once the current cold snap
gripping the eastern half of the U.S. recedes," Meir said.
U.S. INVENTORIES
U.S. crude oil inventories probably rose by 400,000 barrels
last week as imports rebounded, in what would be the first gain
in six weeks, according to a preliminary Reuters poll before the
release of weekly inventory reports. []
Industry group the American Petroleum Institute will publish
inventory statistics on Tuesday at 2130 GMT, while the U.S.
Energy Information Administration will follow with government
figures on Wednesday at 1530 GMT.
In the previous five weeks, crude inventories had tumbled
more than 24 million barrels, the biggest five-week drop since
June 2008, as refiners, in their usual year-end practice, used
more of their stored supplies and tried to hold down imports to
lower their taxes for 2010. []
Distillate stocks, which include heating oil and diesel, may
have increased 1.3 million barrels for their third straight
weekly gain, while gasoline stocks probably rose 2.8 million
barrels, the survey showed.
Front-month ICE Brent crude <LCOc1> rose 62 cents to $96.32
by 1255 GMT, stretching its hefty premium over U.S. crude to an
eight-month high of almost $6.60, supported by tight North Sea
crude supplies and the Alaskan pipeline problems.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic of Brent price strength relative to U.S. crude:
http://r.reuters.com/vys94r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The closure of the Alaskan pipeline has also encouraged
consumers to buy North Sea crudes, traders say, and is also
likely to support Middle East crudes, such as Oman.
Oil demand has picked up strongly over the last year as
economic growth has rebounded after the global downturn.
"The market is supported by robust economic growth and
capital inflows from investors," said Eugen Weinberg, head of
commodities research at Commerzbank in Frankfurt.
China's crude oil imports rose 17.5 percent to a record 4.79
million bpd in 2010 from a year ago, official data showed on
Monday, but the growth may slow this year as fewer new
refineries come on stream. []
In other markets, the euro languished near a four-month low
on Tuesday after a brief rally triggered by a Japanese plan to
buy euro bonds, while Asian stocks drifted, fearful of Portugal
becoming the next casualty of the euro zone's debt crisis.
[]
U.S. crude prices reached a 27-month high of $92.58 last
week on expectations that a sustained economic recovery would
boost energy demand from both emerging markets and
industrialised nations.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Alison Birrane)
