The pipeline was shut down Saturday after Alyeska Pipeline Service discovered the leak. Alyeska has stated that they are developing a plan to restore the pipeline for the entire 800 mile line. Gasoline prices also came under pressure from traders for the closure.
In reports from Reuters News, "shutdown of one of the United States key oil arteries, which carries about 12 percent of the country's production, is the latest setback for the aging, 33 year old pipeline, which handles less than a third of the oil it did at its peak in the 1980s. Closures of the pipeline, although short, has provoked criticism of its operators, particularly major owner BP, whose reputation is already at an all time low after the Gulf of Mexico blow out last year, causing the largest ever U.S. oil spill.
The shutdown of the 800 mile line, which runs from the Prudhoe Bay oilfield to the tanker port of Valdez, has not yet affected shipments and tankers are being loaded on schedule at Valdez, meaning there is no immediate danger of restricted oil supply. Oil produced during the shutdown will be stored at Prudhoe Bay until the pipeline reopens".
With tankers loading on schedule this should have effect on futures prices but this will become a political football for both sides of the isle. The left will paint this as another reason to curtail oil production and the right will be calling for a new energy policy out of Washington. Jobs? Remember the 70's and all of the men traveling to Alaska to build the pipeline? A new pipeline and a few "fast tracked federal approvals" for some new nuclear power plants would go along way to getting to Americans back to work. And all done with private money, what a concept.
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Crude oil was higher due to short covering overnight as it consolidates some of last week's decline but remains below the 20 day moving average crossing at 89.87. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If February renews last week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 89.87 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 89.87. Second resistance is last Monday's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Tuesday morning is 89.12.
Natural gas was slightly higher overnight as it consolidates some of last week's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20 day moving average crossing at 4.315 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.315. Second support is December's low crossing at 3.985. Natural gas pivot point for Tuesday morning is 4.390.
Gold was higher due to short covering overnight as it consolidates some of last week's decline. Stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1391.50 would confirm that a short term low has been posted. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 10 day moving average crossing at 1391.50. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Tuesday morning is 1371.80.
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