Oil price hits two-year high

The price of oil struck a two-year peak above 98 dollars per barrel here on Wednesday as a trans-Alaskan pipeline, which carries 12 percent of US production, remained shut following a leak.

Traders were meanwhile awaiting Wednesday’s publication of official weekly crude inventory data for the United States — which is the world’s biggest oil consuming nation.

Brent North Sea crude for delivery in February reached 98.46 dollars a barrel in early London trade, which was the highest level since October 1, 2008.

Profit-taking set in approaching midday, causing it to stand at 97.59 dollars, down two cents compared with Tuesday’s closing level.

New York’s main contract, light sweet crude for February, dipped four cents to 91.07 dollars per barrel.

“There are quite a few good reasons that could explain and verify the current high oil prices,” said Myrto Sokou, an analyst for the Sucden brokerage in London.

As well as the Alaskan pipeline shutdown, “forecasts about heavy winter conditions in the US northeast as well as strong equity markets could provide further support to crude… while it might be fairly soon that we can see the oil prices back to the $100 level,” she added.

The 800-mile (1,300-kilometre) pipeline delivers between 630,000 and 650,000 barrels a day of crude produced in the Arctic region to Valdez port in southern Alaska, from where it is delivered to the US mainland.

“There is some uncertainty surrounding the pipeline leak in Alaska,” said analyst Matt Smith of Summit Energy.

“There has not been any clarity about when it would be resolved.”

Smith said that US oil supplies were generally strong, but that the lack of information on how long the pipeline will remain closed nevertheless impacted prices.

“Until we have more clarity around that, there is going to be a premium in prices,” he added.

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