Oil prices drop ahead of US data
World oil prices eased Tuesday as traders awaited the US government’s monthly assessment for the global energy market, and the focus turned away from supply worries in Alaska, analysts said.
New York’s main contract, light sweet crude for February delivery, slipped 11 cents at $89.14 a barrel.
Brent North Sea crude for February fell 37 cents to $95.33 in late morning London deals.
“Today, the US government releases its monthly outlook for global oil demand, which is expected to show weaker crude oil demand growth for 2012, especially if China limits its oil consumption,” said Sucden analyst Myrto Sokou.
“Later on the day, the main focus will switch to the weekly API oil inventories report that is expected to show builds in oil inventories and it is likely to add some pressure to crude oil prices.”
The oil market rose Monday after a pipeline spanning Alaska, which carries an estimated 12 percent of US crude output, was shut over the weekend because of a leak.
“There are still no clear signals over when the Trans Alaska Pipeline will resume flows but concerns are easing,” noted analyst Bjarne Schieldrop at SEB Commodity Research.
Alyeska, the operator, closed the pipeline after discovering oil leaking into a station pump on Saturday.
The huge pipeline that crosses the North Slope oil region, from the Arctic to southern Alaska, carries between 630,000 and 650,000 barrels of crude a day.
Oil companies were forced to slash production by 95 percent.
“I believe (the trans-Alaska pipeline shutdown) is not too serious as pipeline flow will resume in days from a bypass line around the leak,” said Victor Shum, an analyst at Purvin and Gertz international energy consultants.
In addition, US oil refineries appear to have sufficient stocks to buffer the supply shutdown.
“The US west coast refineries have inventories to cushion this interruption in supply of Alaska crude flow but they have not used these government inventories,” Shum said.
Alyeska said there was no apparent impact on the environment as a result of the leak.