The oil price is higher Friday, as the Forties pipeline closure continues to add to upward pressure on oil stocks. Oil price gains come despite news of rising US oil output.
By 1445 BST, the price of Brent Crude oil was 0.28% higher at $63.49 per barrel. Meanwhile, the price of US WTI crude oil gained 0.56% to $57.36 per barrel. While the oil price is on the up, it has retreated from higher levels earlier in the week. Brent crude topped $65 per barrel, Tuesday.
Oil output considered a little lower overall
While the hairline crack discovered in the North Sea Forties pipeline is reported to have stabilised and the cordon reduced, repairs to the crack are still ongoing and are set to take a number of weeks.
The Forties pipeline is responsible for transporting around 450,000 barrels of oil per day to the UK. That means the closure represents significant upward pressure on the level of oil available and is pushing prices higher.
The pipeline outage comes soon after OPEC confirmed it was keeping the output cap in place until the end of 2018. And, it also follows news from the EIA that US oil stocks declined for a third straight week in December.
However, traders said it was the Forties closure that was the main driving force behind higher oil prices, Friday.
“If the duration of the outage is for several weeks it should put upward pressure on the Brent price,” Jefferies analysts said in a note, according to Reuters.
US oil output grows
While investors appear to be mainly focussing on the downward output pressures, news that US oil production continues to grow has tempered those gains a little.
The EIA’s report also showed that US oil output hit a record high of 9.78 million barrels per day, in the week ended Dec 8th.
However, right now, analysts are anticipating oil demand to remain strong which should mean US output doesn’t weigh on the oil price, too much.