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Oil edges up on North Sea pipeline outage

20 December 2017 17:43 (UTC+04:00)
Oil edges up on North Sea pipeline outage

By Sara Israfilbayova

World prices for “black gold” are increasing on December 20 during the trading in Asia on expectations of further reduction of fuel stocks in the U.S., and also because of the still inoperative pipeline in the North Sea.

Brent crude futures, the international benchmark for oil prices, were at $63.81 a barrel up 1 cent from their previous close, U.S. West Texas Intermediate (WTI) crude futures were up 21 cents at $57.77 a barrel, Reuters reported.

The American Petroleum Institute (API) reported that during the week ended December 15, gasoline stocks in the U.S. fell by 5.2 million barrels - to 437.8 million barrels. Although analysts predicted a smaller decline in the figure-only 3.8 million barrels. At the same time, distillate stocks fell by 2.9 million barrels. Oil reserves at the country's largest terminal in Cushing have grown by only 70,000 barrels.

“The API is the reason why the energy complex is slightly up this morning,” said Tamas Varga, analyst with PVM Oil Associates.

Prices for Brent crude oil remain under pressure of news about the repair of part of the Forties pipeline. Earlier, production at the Forties field was stopped due to unplanned repairs of part of the pipeline. It provides delivery of raw materials from 85 fields in the North Sea and pumps about 450,000 barrels per day. Deliveries of oil from Forties have been delayed for at least two weeks.

On the eve of the petrochemical company Ineos, which owns the pipeline, informed that soon the parts needed for repairing the pipeline will be delivered.

In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan agreed to reduce oil output by 558,000 barrels per day, including Russia by 300,000 barrels per day, starting from January 1, 2017 for six months, extendable for another six months.

OPEC and its allies reached an agreement on prolongation of the deal until the end of 2018 on November 30 in Vienna.

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