Oil prices moved up on 15 December, lifted by the Forties pipeline outage in the North Sea and ongoing OPEC-led production cuts, although rising output from the United States kept a lid on markets.
U.S. West Texas Intermediate (WTI) crude futures were at $57.28 a barrel, up 26 cents, or 0.5 percent, from their last settlement. Brent crude futures were at $63.47 a barrel, up 16 cents, or 0.25 percent, from their previous close. The ongoing outage of the Forties pipeline, which carries North Sea oil to Britain, was the main price driver. While the pipeline outage physically mostly affects the North Sea region, it is of global relevance as the crude it supplies is part of the supply that underpins the Brent price benchmark.
Undermining OPEC’s efforts to tighten the market is U.S. oil production, which has soared by 16 percent since mid-2016 to 9.78 million barrels per day (bpd), close to levels of top producers Russia and Saudi Arabia. Rising U.S. supply, driven largely by shale drilling, will likely move oil markets into a supply surplus in the first half of 2018, the International Energy Agency (IEA) said on 14 December.
The Paris-based IEA said in its monthly oil market report: “Total supply growth could exceed demand growth; indeed, in the first half the surplus could be 200,000 barrels per day (bpd) before reverting to a deficit of about 200,000 bpd in the second half, leaving 2018 as a whole showing a closely balanced market.”
December 15, 2017