Commodity Corner: Alaska Pipeline Closure Propels Oil Price
Front-month crude oil rose $1.22 Monday amid concerns about potential supply constraints from the closure of the Trans Alaska Pipeline.
Oil for February delivery ended the day at $89.25 a barrel. The 800-mile-long oil pipeline, which ships production from Alaska's North Slope to the port of Valdez, is a key conduit for feedstock processed by West Coast refiners.
Alyeska Pipeline Service Co., which operates and maintains the 48-inch-diameter pipeline, shut down the pipeline Saturday after discovering a small leak. The company announced Sunday that engineers are developing a plan to leak-test lines as well as design options to restore pipeline throughput.
Oil traded within a range from $88.13 to $89.98.
News of the pipeline outage also placed upward pressure on the price of gasoline. February gasoline settled four cents higher at $2.45 a gallon. It peaked at $2.47 and bottomed out at $2.41.
Predictions of milder weather next week caused natural gas futures to end the day lower. February natural gas lost two cents Monday to settle at $4.40 per thousand cubic feet.
Natural gas fluctuated from $4.32 to $4.45.