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Alaska Pipeline Outage Could Buoy Tanker Demand, Platou Says

The shutdown of a pipeline supplying Alaskan crude oil to the U.S. may bolster demand for supertankers as refineries are forced to seek replacement shipments from overseas, RS Platou Markets AS said.

A “prolonged” pipeline stoppage “would likely lead to positive long-haul tanker demand,” analysts Dag Kilen and Frode Morkedal wrote in a note to clients today.

Returns from shipping Middle East oil to the U.S. have been negative for the past 25 sessions, sliding to minus $7,370 a day on Jan. 7, according to data from the London-based Baltic Exchange. Owners will sometimes accept unprofitable charters to get a contribution to fuel costs when they want to redeploy vessels to regions where rental income is higher.

A return trip to the U.S. from West Africa earns owners $30,442 a day, according to data compiled by Bloomberg.

BP Plc and its partners in the Trans-Alaska Pipeline System that carries 15 percent of U.S. crude output can’t say when production will return to normal after a leak two days ago.

The shutdown forced BP, ConocoPhillips and Exxon Mobil Corp. to suspend 95 percent of production from the North Slope area. The pipeline was still closed as of 2:21 p.m. local time yesterday with no estimate of when it will return to service, said Michelle Egan, a spokeswoman for operating partnership Alyeska Pipeline Service Co.

To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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