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Oil up ahead of US data, Alaska supports

US crude CLc1 rose 36 cents to $76.67 a barrel, less than $2 shy of its peak in July. London Brent crude LCOc1, which hit a new high of $78.65 a barrel before succumbing to profit-taking on Tuesday, was trading up 48 cents at $78.03.

Prices had eased a little from record peaks on Tuesday amid hope that some output from BP’s Prudhoe Bay field in Alaska, which represents 8 percent of total US production, could be maintained.

BP’s decision to close the field due to corroding pipes sparked a three percent price rally on Monday.

Relatively healthy global crude oil inventories have provided a cushion for disruptions, but there are signs that missing supplies may be gradually eroding that surplus.

US government data due on Wednesday is expected to show crude stocks fell by 800,000 barrels last week and gasoline stocks fell 1.1 million barrels, according to a Reuters poll. [EIA/S]

“Normally at this time of year, there may be very small draws. You have to have something big before the market takes notice of it,” said London-based oil analyst Geoff Pyne.

Supply concerns

Some analysts were sceptical that even a limited flow from the 400,000 barrels per day BP field could be maintained, given the regulatory scrutiny BP was facing and the logistical challenges in buying pipes and installing them in the harsh north.

BP said it was talking with regulators about ways to keep pumping from the western side of the field, which produces 185,000 barrels per day, while it replaces pipelines.