Oil gains as Forties outage, Nigeria strike threaten supply
Oil prices edged higher on Monday, supported by a North Sea pipeline outage and a workers` strike in the Nigerian energy industry.
A fall in the number of U.S. rigs drilling for oil also underpinned prices, but growth in U.S. crude output cast a shadow over the market.
Brent crude futures, the international benchmark, were at $63.59 a barrel at 1415 GMT, up 36 cents.
U.S. crude futures were at $57.67, up 37 cents.
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.
The 450,000-barrels-per-day (bpd) link that provides some of the physical crude underpinning Brent has been shut since Dec. 11, forcing Ineos to declare force majeure on all oil and gas shipments from it last week.
"There is still no reliable information about how long the repair work will last and when the pipeline will go back into operation," Commerzbank said in a note, adding "this should preclude any fall in the Brent price for the foreseeable future".
Workers from one of Nigeria`s largest oil unions began strike action on Monday, sparking concerns over exports from Africa`s largest crude producer.
The Petroleum and Natural Gas Senior Staff Association of Nigeria, whose members mainly work in the upstream oil industry, said they were holding talks with labour ministry officials over the indefinite strike.
In the United States, energy companies cut rigs drilling for new production for the first time in six weeks, to 747, in the week ended Dec. 15, energy services firm Baker Hughes said on Friday.
Activity is still well above this time last year, when the rig count was below 500. Actual U.S. production has soared 16 percent since mid-2016 to 9.8 million bpd.
U.S. output is approaching that of top producers Saudi Arabia and Russia, which are pumping 10 million bpd and 11 million bpd respectively.
This has undermined market-balancing efforts by the Organization of the Petroleum Exporting Countries and a group of non-OPEC producers including Russia to withhold production.
Largely because of rising U.S. shale output, the International Energy Agency said global oil markets would show a supply surplus of around 200,000 bpd in the first half of 2018.
The U.S. Energy Information Administration showed a similar surplus for that period and indicated a supply overhang of 167,000 bpd for all of 2018.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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