Oil prices rose modestly on Monday, after spiking by almost $2 a barrel earlier in the day, after reports that an Alaskan pipeline -- shut down on Saturday due to an oil leak -- will reopen within days.
The Wall Street Journal, citing an unnamed person familiar with the pipeline's operation, reports the Trans-Alaska Pipeline system could be up and running before Friday, less than a week after the Alyeska Pipeline Service shut down the 800-mile network. BP Plc (BP) and Exxon Mobil (XOM) were among companies that shut down production on Alaska's North Slope, which accounts for about 9% of U.S. oil output, the Journal said.
Oil prices had already been surging in recent weeks on a combination of tightened petroleum inventories and what may be a slight resurgence in the U.S. economy, which is increasing demand and causing some analysts to predict that oil will hit $100 a barrel early this year. U.S. commercial crude inventories totaled 335.3 million barrels for the week ended Dec. 31, down 4.2 million barrels from a week earlier, according to the U.S. Energy Information Administration (EIA).
Oil for February delivery rose $1.22 a barrel, or 1.4%, to $89.25 after touching $89.98 earlier Monday.
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