Oil rose above $65 a barrel for the first time since mid-2015 on Tuesday as an unplanned shutdown of the UK’s biggest North Sea oil pipeline supported a market already tightened by Opec-led production cuts.
The Forties oil pipeline helps set global oil prices. It was scheduled to pump 406,000 barrels per day (bpd) in December, but was shut down on Monday after cracks were found in what traders believe is the first unplanned outage for some years.
Brent crude, the global benchmark, was up by 90 cents at $65.59 at 0915 GMT, after breaking above $65 for the first time since June 2015 and trading as high as $65.70. US crude rose 49 cents to $58.48.
“Such a reaction indicates that supply disruptions can no longer be ignored in tight markets,” said Hussein Sayed, analyst at FXTM.
The Forties pipeline is important for the global oil market because the crude it carries normally sets the price of dated Brent, a benchmark used to price physical crude around the world and which underpins Brent futures.
Analysts said the outage was likely to cause significant delays in the loading of Forties crude cargoes.
“The complex is receiving support from the physical side and what is expected to be a multi-week outage,” JBC Energy said. “We would expect a large deferrals list for the Forties loading programme to spill over into January.”
Oil also gained support from expectations the latest reports on US inventories will show a further tightening of supplies Read More