Oil prices hovered above $89 a barrel Tuesday in Asia as traders eyed repairs on a shutdown Alaskan pipeline that has cut crude production from the biggest U.S. state.
Benchmark oil for February delivery fell 4 cents to $89.21 a barrel late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
The contract climbed $1.22 to settle at $89.25 on Monday on a 800-mile (1,300-kilometer) trans-Alaska pipeline, which normally carries between 620,000 barrels a day, was shut Saturday after a leak was discovered at a North Slope pump station. Oil production on the North Slope was cut by 95 percent.
Alyeska Pipeline Service Co., which operates the pipeline from Prudhoe Bay, said Monday it had welders working around the clock on a bypass line to circumvent the leak and restore the flow of oil, though no restart date was given.
“If the pipeline is not returned to service rather soon, the impact on West Coast refineries will eventually become acute,” Cameron Hanover said in a report. “The assumption is that the pipeline will be fixed quickly. Once we know how long it will take to fix, most of the buying will be over.”
In other Nymex trading in February contracts, heating oil slid 0.4 cent to $2.55 a gallon while gasoline futures fell 0.5 cent to $2.45 per gallon. February natural gas futures slid 1.8 cents to $4.38 per 1,000 cubic feet.
In London, Brent crude was down 20 cents to $95.50 a barrel on the ICE Futures exchange.