* Officials hope Alaska pipeline can restart this week
* Technicals show US crude rally towards $91 []
* Coming Up: API U.S. weekly oil inventory report; 2130 GMT
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, Jan 11 (Reuters) - Oil steadied above $89 per barrel
on Tuesday, paring early gains on expectations that a key
Alaskan pipeline would resume operations within a few days.
The 800-mile (1,280-km) Trans Alaska Pipeline, which carries
oil from Alaska's North Slope, was closed after a leak was
discovered on Saturday, shutting in flows equivalent to 12
percent of U.S. crude output. []
U.S. crude for February <CLc1> was little changed on the day
by 0845 GMT, down 15 cents at $89.10 a barrel after trading as
high as $89.67 at the start of the session.
Officials said on Monday the Alaskan pipeline should reopen
later this week. Producers in Alaska's Prudhoe Bay region have
cut output by about 600,000 barrels per day (bpd) to just 5
percent of normal levels.
Traders said they saw the closure of the pipeline as only a
temporary support for oil prices.
A bypass line at the affected area would allow the duct's
operator, Alyeska Pipeline Service Co, to restart the system.
Past shutdowns have generally been short-lived, and tanker
shipments from Alaska's Valdez port have not yet been hit.
"We do not believe that this interruption will translate
into any meaningful disruption (to oil supply) as stockpiles
remain more than adequate," said Edward Meir, senior commodity
analyst at brokers MF Global.
"Consequently, some of (the) gains could be rolled back
later in the week, particularly once the current cold snap
gripping the eastern half of the U.S. recedes."
U.S. INVENTORIES
U.S. crude oil inventories probably rose by 400,000 barrels
last week as imports rebounded, in what would be the first gain
in six weeks, according to a preliminary Reuters poll before the
release of weekly inventory reports. []
Industry group the American Petroleum Institute will publish
inventory statistics on Tuesday at 2130 GMT, while the U.S.
Energy Information Administration will follow with government
figures on Wednesday at 1530 GMT.
In the previous five weeks, crude inventories had tumbled
more than 24 million barrels, the biggest five-week drop since
June 2008, as refiners, in their usual year-end practice, used
more of their stored supplies and tried to hold down imports to
lower their taxes for 2010. []
Distillate stocks, which include heating oil and diesel, may
have increased 1.3 million barrels for their third straight
weekly gain, while gasoline stocks probably rose 2.8 million
barrels, the survey showed.
Front-month ICE Brent crude <LCOc1> shed 40 cents to $95.30
by 0845, maintaining a hefty premium of more than $6 over U.S.
crude, supported by a combination of tight North Sea crude
supplies and disruption of oil grades priced off it.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic of Brent price strength relative to U.S. crude:
http://r.reuters.com/vys94r
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The closure of the Alaskan pipeline has also encouraged
consumers to buy North Sea crudes, traders say, and is also
likely to support Middle East crudes, such as Oman.
China's crude oil imports rose 17.5 percent to a record 4.79
million bpd in 2010 from a year ago, official data showed on
Monday, but the growth may slow this year as fewer new
refineries come on stream. []
In other markets, the euro languished near a four-month low
on Tuesday after a brief rally triggered by a Japanese plan to
buy euro bonds, while Asian stocks drifted, fearful of Portugal
becoming the next casualty of the euro zone's debt crisis.
[]
U.S. crude prices reached a 27-month high of $92.58 last
week on expectations that a sustained economic recovery would
boost energy demand from both emerging markets and
industrialised nations.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Jane Baird)
