Temporary Oil Production Delays And Cold Temperatures Impact Prices
The Trans Alaska Pipeline was shut down on Saturday following the discover of a leak at an intake pump station at Prudhoe Bay, constricting supply in one of the United States' key oil arteries. Cold weather in the Northeast during December translated into 5 consecutive stock draws in the Central Atlantic, while New England stocks fluctuated during the month.
By Dave Brown - Exclusive to Oil Investing News The Trans Alaska Pipeline was shut down on Saturday following the discover of a leak at an intake pump station at Prudhoe Bay, constricting supply in one of the United States' key oil arteries. Alyeska Pipeline Service Co.is the operator of the 1,280 kilometre line which runs from the Prudhoe Bay oilfield to the tanker port of Valdez. The company is owned by a consortium of oil companies with interests on Alaska's North Slope, the third largest U.S. oil producing region after the Gulf of Mexico and Texas. The pipeline carries between 12 to15 percent of U.S. crude output. The incident for the 33 year old oil artery is the latest on record since an electrical outage during scheduled maintenance caused crude oil to overflow at a storage tank at a pump station, dumping approximately 5,000 barrels from the tank into a lined containment area on the ground at the end of last May. Major owners in the region include ExxonMobil (NYSE: XOM), British Petroleum (NYSE: BP) and ConocoPhillips (NYSE: COP). Following the pipeline closure crude oil futures gained for the first time in three days, as the news flow generated as much as 2.2 percent appreciation. There is no estimate of how much oil leaked, but Alyeska said no oil has been found to have escaped beyond concrete encasing the pipeline. Companies will be forced to suspend 95 percent of production from the North Slope area. Robert Montefusco, a senior broker at Sucden Financial indicated “Oil prices are being supported today by the leak at the Trans-Alaska pipeline.” Analysts expect that the pipeline will be closed for about one week and production will quickly return to normal. The short term forecast is that the price of crude oil will probably trend back down towards the $88 range, where it had been trading.