WTI oil price firm over $91 on US crude oil supply fears

WTI oil prices open today’s trading session firm over $91 a barrel, after surging around $3 in trading on Tuesday as oil traders remained fearful of US oil supply disruptions from the closure of a major Alaskan pipeline.

Latest WTI Oil Price

US Light crude oil futures for Feruary 2011 delivery was trading at $91.24 a barrel, 07.30 GMT this morning on the NYMEX after closing yesterday’s session at $91.27.

WTI and Brent Price Divide

Analysts said that crude oil storage constraints at Cushing, which is the delivery point for WTI NYMEX crude oil, has kept prices of NYMEX traded oil futures contracts depressed compared to Brent oil futures, which are currently around $6 higher.

Alaska Uncertainty Lifts WTI Oil

“Some of the strength today was the risk and uncertainty of the restart out in Alaska. They need to be a little more definitive about when the flow is going to start.” said Jim Ritterbusch, head of oil trading advisory firm Ritterbusch and Associates.

Operators of Alaska’s main oil pipeline are working to resume flow on receiving government permission for a temporary restart after a leak idled twelve percent of US crude oil output.

The Trans Alaska Pipeline System has been closed since Saturday following a small leak at an oil pumping station. The restart will prevent crude oil from freezing while a bypass of the leak is complete.

With the temporary restart, Alyeska is seeking to prevent oil in the pipeline from freezing, which would make a resumption of normal flows more difficult. The bypass is expected to be completed this week, though there was no exact timetable.

EIA Oil Supply Data, Energy Outlook Forecast

The US EIA (Energy Information Administration) forecasts that crude oil markets will tighten over the next 2 years as annual consumption grows by an average 1.5 million barrels per day and growth in supplies outside OPEC member countries increases less than 100,000 barrels per day yearly, EIA said in its latest Short Term Energy Outlook, released yesterday.

Their forecast, which was the first by EIA to cover periods through to December 2012, raised its prediction of WTI oil prices by $7 a barrel from a month earlier to about $92 a barrel after WTI prices averaged more than $89 a barrel in December 2010, about $5 a barrel more than November’s average.

The EIA’s forecast said that WTI oil prices could average $93 a barrel during 2011, reaching an average $99 a barrel in the fourth quarter, and average $98 a barrel in 2012.

Meanwhile, oil traders and investors are awaiting the latest weekly WTI oil supply and inventory data, due out later today, and are expecting a modest 500,000 barrel drop in US crude oil inventories.