Oil crawls up as United Kingdom pipeline still out

Oil crawls up as United Kingdom pipeline still out

Oil crawls up as United Kingdom pipeline still out

Oil prices edged higher on Monday, supported by a North Sea pipeline outage and a workers' strike in the Nigerian energy industry.

Brent crude LCOc1, the global benchmark, was up 13 cents or 0.2 percent to $63.54 a barrel at 11:45 a.m. (1645 GMT) U.S. crude CLc1 gained 25 cents or 0.4 percent to $57.41. Brent had traded as high as $63.91 earlier in the day but pared gains after Ineos, operator of the North Sea Forties pipeline, said the crack that shut it down had not spread.

There has been little price movement in recent trading, with Brent moving within a $63.00 to $63.91 per barrel range since last Friday.

"The Forties pipeline outage is continuing to be supportive of the market", said John Kilduff, partner at Again Capital.

Further price support has been coming from voluntary supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers including Russian Federation.

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As a result of the production restraint and disruptions, oil inventories are falling globally. "This clearly indicates that the market in [the fourth quarter of 1017] is in material [1-million barrels a day] supply deficit", said researchers at Bernstein Energy.

"Global inventories now stand at less than 56 days (of demand)".

OPEC and its allies have extended the agreement until the end of 2018 and Russia's Rosneft said on Monday it could be maintained beyond next year.

Threatening to undermine the Opec-led efforts to tighten markets is U.S. crude production, which has soared by 16% since mid-2016 to 9.8-million barrels a day. US production has soared 16 percent since mid-2016 to 9.8 million bpd, approaching the output of top producers Saudi Arabia's 10 million bpd and Russia's 11 million bpd. US shale output in January is forecast to increase by 94,000 barrels per day to 6.41 million bpd, according to the EIA's monthly drilling productivity report.

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