Isra-Mart srl:Oil prices hit 27-month high as supply fears mount

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Isra-Mart srl news:

Oil prices today reached their highest levels since late 2008 after engineers working to plug the leak in a crucial pipeline in Alaska signaled it would probably take five days for the pipe to come back online.

The cost of a barrel of Brent Crude hit a 27-month high of $98 in early trading in London this morning, while the price of US crude oil has hit similar highs of $91.65.

The recent spike in prices started over the weekend after BP, the largest shareholder in the Alyeska Pipeline Service, confirmed the Trans-Alaska Pipeline Service which carries around 15 per cent of US oil output from Prudhoe Bay had been closed following the discovery of a small leak.

The temporary closure of the pipeline has led to a 95 per cent cut in production from the Prudhoe Bay oil field.

Alyeska said last night that while it would temporarily turn the pipe on today to ensure the system does not freeze up, it will take around five more days to install the new pipe required to bypass the leaking section.

The news came as the World Economic Forum released its annual Global Risk Report, warning that the global economy is currently in "no position to face major, new shocks".

The wide-ranging report said that the economic crisis of the last few years had undermined countries' ability to cope with unforeseen events. It also warned that the risk of shocks had increased, noting that the global economy was likely to face increased pressure in the coming years as a result of a wide variety of threats, including "unsustainable" demand for food, water and energy, as well as high and volatile commodity prices.