Oil mixed after United States crude stocks draw; Forties outage lends support

Marco Green
December 14, 2017

The benchmarks, Brent crude was up 58 cents a barrel and settled down at $1.35, or 2.1%, on Tuesday and U.S. West Texas Intermediate crude was up 54 cents a barrel.

Brent crude futures, the global benchmark for oil prices, were at $62.84 a barrel, up 40 cents or 0.6 percent from their last close.

On Wednesday, the increase was seen in the prices of oil as industry data showed a larger-than-expected drawdown in USA crude stockpiles.

Despite the rise, Brent was well below the $65.83 a barrel June 2015 high reached earlier this week.

USA crude inventories last week dropped 5.1 million barrels, more than anticipated, and production hit another record high at 9.78 million barrels per day (bpd), government data showed.

"A decline in the open interest on the future...is pointing towards some year-end profit-taking after the latest leg-up in prices", said Ole Hansen, head of commodity strategy at Denmark's Saxo Bank.

Gasoline stocks jumped 5.7 million barrels, more than double analysts' expectations for a 2.5 million-barrel gain.

Exports of natural gas from one of the North Sea's key fields have been halted for at least three weeks until early January, after the closure of Britain's largest oil and gas pipeline, field operator Total (LSE: 524773.L - news) said on Wednesday.

"The fact that the market sold off so much after the Forties outage shows that the market struggles to trend higher".

That's according to industry body Oil & Gas UK, which made the comment following INEOS' announcement to close the Forties Pipeline System for fix.

Nexen, owned by the China National Offshore Oil Corporation, said last month that Buzzard was producing between 160,000-170,000 barrels per day.

Other reports by Click Lancashire

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