* Oil up as much as 2.2 pct on Trans-Alaska pipeline leak
* Short term supply threat, longer term regulatory risks
support
* Technicals point to weaker crude prices
By Nick Trevethan
SINGAPORE, Jan 10 (Reuters) - Oil surged almost $2 on
Monday to within 2 cents of $90 a barrel after a leak shut an
Alaskan pipeline that carries 12 percent of U.S. crude output.
The Trans Alaska Pipeline was shut down on Saturday after
a leak at the start of the pipeline in Prudhoe Bay, forcing
oil companies to cut output to 5 percent of their daily
average of 630,000 barrels. []
The shutdown of one of the key oil arteries in the United
States, which carries about 12 percent of the country's
production, sent crude prices leaping early in Asia to a high
of $89.98 a barrel, as buyers worried about crude availability
in the PADD 5 region -- the western United States.
"The refineries in PADD 5 might be able to obtain supplies
from overseas. The longer term implication of such leaks would
be mounting public scrutiny on the regulation on maintenance
of oil production and distribution infrastructure," said Chen
Xin Yi, associate vice president at Barclays Capital in
Singapore.
By 0430 GMT, NYMEX crude for February <CLc1> rose $1.32 to
$89.35 a barrel, recovering losses from the previous two
sessions. Brent crude <LCOc1> rose 83 cents $94.16.
"This adds to what happened in the Gulf of Mexico at a
time when U.S. regulators are still looking at regulations
around oil drilling," said Ben Westmore, commodities analyst
at National Australia Bank.
"Events like this carry risks around future regulation
that could dramatically reduce supply on a more permanent
basis than this temporary outage. There is a possibility the
risk is pretty substantial for the (oil futures) market."
For a list of incidents at the pipeline, click
[].
Traders said that if the outage lasted longer than a week
or two, it has the potential to be very bullish. One noted
that most of the pipeline's problems had been fixed quickly,
but in the post-Deepwater Horizon world, approvals to restart
after accidents could take longer.
Before the weekend, a fire halted production at Canadian
Natural Resources main oil sands project in northern Alberta.
The firm could not say on Friday when its 110,000 barrel a
day Horizon facility would resume normal operations, though it
expects to have a repair schedule ready this week.
[]
China trade data showed China imported 20.86 million
tonnes down 0.2 percent from November. For the year, China
imported 239.31 million tonnes of crude oil, up 17.5 percent
from 2009.
Data before the weekend, namely U.S. non-farm payrolls
which rose just 103,000 against forecasts of 175,000 unsettled
the market. But the jobless rate fell to 9.4 percent from 9.8
percent in November, its lowest in more than 1-1/2 years.
[]
"A drop in the unemployment rate to 9.4 percent wasn't
enough to remove 'risk-off' sentiment in the market. Recent
U.S. oil futures data showed 'speculative' net long crude
futures positions were down 5.6%, also suggesting a possible
bearish turn in sentiment," said ANZ in a note.
Money managers sharply cut their net long crude futures
positions in the week through Jan. 4 from a record level in
the previous week, the Commodity Futures Trading Commission
said.
The speculator group cut their net long positions to
175,862 from 202,221 positions in the previous week, as NYMEX
oil futures prices <CLc1> fell from $91.49 a barrel on Dec. 28
to $89.38 a barrel on Jan. 4.
Technically, oil still looked weaker and oil will end the
current rebound and fall back to Friday's low at $87.25 as a
downward wave "C" has not been completed, according to
Reuters technical analyst Wang Tao said. []
For a graphic, click:
http://graphics.thomsonreuters.com/WT/20111001083830.jpg
(Editing by)
