On the final trading day of 2017, Brent crude futures were up, rising 23 cents to $66.39 a barrel, Reuters reported, noting that Brent broke through $67 earlier this week for the first time since May 2015. WTI crude futures were at $60.07 a barrel at 1150 GMT, up 23 cents or 0.4% from their last close, after hitting a June 2015 high of $60.32.
“Outages from Libya and also from the Forties field have pushed the price up,” Justin Urquhart Stewart, director at Seven Investment Management in London, told New Europe by phone on December 28. The Forties pipeline, which carries UK North Sea crude across sea and land for processing at Grangemouth, was closed after the crack was discovered at the start of December.
The outage at the Forties pipeline and Libya outages have more of an effect on Brent than WTI. “We had the Libyan issue pushing prices up and that’s always a concern because not only is the infrastructure very pour but there’s no consistency in production and if you take that out then I think that’s going to be leading to more spikes,” Urquhart Stewart said. “It’s interesting to see how quickly the spikes can come through so we had Forties, we had Libya and anything else that could actually provide another spike up,” the London-based analyst added.
Led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, production cuts, which started last January and are scheduled to cover all of 2018, have also supported prices. Urquhart Stewart reminded, “the agreement we had between OPEC and Russia has broadly been sustained”.
The WTI price rises on December 29 were driven by a surprise drop in US oil production, which last week dipped to 9.754 million barrels per day, down from 9.789 million barrels per day the previous week, Reuters reported, citing data from the Energy Information Administration (EIA) released late on December 28.