MARKET WATCH: North Sea pipeline outage supports crude prices
Oil prices rose modestly on the New York market Dec. 14, which analysts attributed to a pipeline outage in the North Sea, noting that price gains appear to be capped by recent production forecasts. The time frame for a restart of the Forties Pipeline System remains uncertain. The system was shut for repairs after a hairline crack was discovered on the onshore portion of the line.
Oil prices rose modestly on the New York market Dec. 14, which analysts attributed to a pipeline outage in the North Sea, noting that price gains appear to be capped by recent production forecasts.
The time frame for a restart of the Forties Pipeline System remains uncertain. The system was shut for repairs after a hairline crack was discovered on the onshore portion of the line (OGJ Online, Dec. 12, 2017).
Paul Horsnell, Standard Chartered commodity research head, said, “Unless [the Forties pipeline shutdown] proves to be a more serious situation than what it currently appears, then I think most of that is already priced in the oil market.”
The International Energy Agency and the Organization of Petroleum Exporting Countries this week each separately revised their non-OPEC supply-growth forecasts upward for 2018.
Stephen Brennock of brokerage PVM told the Wall Street Journal that growing non-OPEC oil production could hinder efforts led by OPEC and some other major producers to reduce world oil supplies.
“OPEC supply restrictions are at risk of being overshadowed by US producers, which will strike back with a vengeance in 2018,” Brennock told the WSJ.
Energy prices
The January 2018 light, sweet crude contract on the New York Mercantile Exchange gained 44¢ on Dec. 14 to $57.04/bbl. The February contract increased 49¢ to $57.08/bbl.
The NYMEX natural gas price for January 2018 fell 3¢ to a rounded $2.68/MMbtu. Meanwhile, the Henry Hub cash gas price held unchanged at $2.67/MMbtu.
Ultralow-sulfur diesel for January 2018 edged up less than a penny to a rounded $1.91/gal. The NYMEX reformulated gasoline blendstock for January 2018 climbed 2¢ to a rounded $1.67/gal.
The Brent crude contract for February 2018 on London’s ICE gained 87¢ to $63.31/bbl. The March 2018 contract climbed 85¢ to $62.66/bbl.
The gas oil contract for January was $562.75/tonne, up $1.25.
OPEC’s basket of crudes was $60.87/bbl on Dec. 14, down 63¢.
Contact Paula Dittrick at paulad@ogjonline.com.
