By Polya Lesova and Lisa Twaronite, MarketWatch
LONDON (MarketWatch) — Crude-oil futures rose on Monday, as news of the shutdown of the Trans-Alaska Pipeline over the weekend raised concerns about a short-term disruption to U.S. oil supplies.
Crude for February delivery advanced 88 cents to $88.91 a barrel in Globex electronic trading. The contract pared some of its earlier gains after surging to an intraday high of $89.98 a barrel.
The Trans-Alaska Pipeline remained shut Sunday local time, reducing output by 95%, after a leak was discovered at a pumping station on Saturday. Read more on Alaska pipeline shutdown.
It was unclear on Monday morning when the pipeline would reopen.
The pipeline carries approximately 15% of U.S. domestic oil production and has transported more than 15 billion barrels of crude oil, according to the website of the Alyeska Pipeline Service Co.
“This is obviously an important story, and should the market get no visibility on the resolution of the issue, prices could very well push higher,” said Edward Meir, senior commodity analyst at MF Global, in a note late Sunday. “However, we suspect a repair timetable will be handed out shortly, and we very well could see prices roll back their recent gains on such news.”
Existing stocks should be “more than adequate” to handle any shortfalls, he added.
Shares of oil giant BP PLC (BP 45.03, -1.05, -2.28%) (UK:BP. 483.25, -9.25, -1.88%) fell 2.5% in London trading on Monday. BP is one of the companies that has had to shut down 95% of production on the North Slope.
In U.S. trading on Friday, crude-oil futures settled lower as the dollar rose, stocks fell and any beneficial effects from the U.S. payroll report faded. See Friday's Futures Movers.
For the week, crude had lost 3.7%, marking its worst-performing week since August.
