Oil Rises on North Sea Pipeline Outage

On Wednesday, the oil prices inched up supported by expectations of a fall in the U.S. crude inventories and by the ongoing outage of the North Sea Forties pipeline system.

The oil prices went up on Wednesday.

The crude futures of the U.S. West Texas Intermediate (WTI) were at $57.73 a barrel, up 17 cents, or 0.3 percent, from their previous settlement.

The international benchmark for oil prices, Brent crude futures, were at $63.91 a barrel, up 11 cents, or 0.17 percent.

“Oil prices inched higher on expectations of another strong drawdown in U.S. inventories,” ANZ bank stated.

The American Petroleum Institute stated on Tuesday that the U.S. crude inventories fell by 5.2 million barrels in the week to 

December 15 to 438.7 million.

The official U.S. government data from the Energy Information Administration (EIA) is due on Wednesday.

The prices of oil have also been supported by the continuing outage of the Forties pipeline in the North Sea, which delivers crude to the underpinning Brent futures.

The operator, Ineos, hopes to be able to fix a crack in the pipeline, which can pump around 450,000 barrels per day of crude, within two to four weeks from December 11.

Regardless of the outage in North Sea and the falling of the U.S. crude inventories, oil prices have remained some way off their $65.63 and $59.05 per barrel recent highs for Brent and U.S. West Texas Intermediate respectively.

According to traders, the rising of U.S. crude production, which has flew by 16 percent since mid-2016 to 9.8 million barrels per day, was capping prices.

Most analysts expect the U.S. output to break through the 10 million barrels per day soon, which would be a new record and take it to levels on par with top exporter in Saudi Arabia and close to top the producer in Russia, which pumps around 11 million barrels per day.

The head of research at commodity brokerage Marex Spectron, Georgi Slavov, warned a possible slowdown in oil consumption, which could put downward pressure on oil prices into 2018.

“Demand, which was the main reason to see oil at/above $60, has weakened. But we continue to lean toward a mildly bearish macro environment for the period on the back of an anticipated slowdown in credit, persistently bearish energy intensity of key oil consuming economies and a seasonal decline in the manufacturing activity,” Georgi Slavov said.

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