Oil edged lower towards $65 a barrel on Dec. 26, but remained within sight of its highest level since mid-2015, as the looming restart of a North Sea oil pipeline offset support from OPEC-led supply cuts.
The North Sea Forties pipeline, which plays an important role in the global oil market, is being tested following repairs and full flows should resume in early January, its operator Ineos said on Monday.
Brent crude, the international benchmark for oil prices, slipped 15 cents to $65.10 a barrel at 1153 GMT. Prices hit $65.83 on Dec. 12, the highest since June 2015. U.S. crude was down 7 cents at $58.40.
"The confirmation that Forties is coming back is the main development of the long weekend," said Olivier Jakob, analyst at Petromatrix. "For sure it has the potential for capping Brent."
Trading activity was thin due to the ongoing Christmas holiday in many countries.
Brent has risen 17 percent in 2017. The Organization of the Petroleum Exporting Countries, plus Russia and other non-members, have been withholding output since Jan. 1 to get rid of a glut.
The producers have extended the supply cut agreement to cover all of 2018.
Iraq's oil minister said on Monday there would be a balance between supply and demand by the first quarter, leading to a boost in prices. Global oil inventories have decreased to an acceptable level, he added.
That's earlier than seen by OPEC's latest official forecast, which calls for a balanced market by late 2018.
While the OPEC action has lent support to prices all year, the unplanned shutdown of the Forties pipeline on Dec. 11 pushed Brent to its mid-2015 high.
Forties plays an important role in the global market as it is the biggest of the five North Sea crude streams underpinning Brent, the benchmark for oil trading in Europe, the Middle East, Africa and Asia.
Rising production in the United States is offsetting some of the OPEC-led cuts.
The U.S. rig count
Recommended Reading
Evolution Petroleum Sees Progress on SCOOP/STACK, Chaveroo Operations
2024-03-11 - Evolution expects to participate in future development blocks, holding in aggregate over 70 additional horizontal well locations.
E&P Highlights: Feb. 16, 2024
2024-02-19 - From the mobile offshore production unit arriving at the Nong Yao Field offshore Thailand to approval for the Castorone vessel to resume operations, below is a compilation of the latest headlines in the E&P space.
Well Logging Could Get a Makeover
2024-02-27 - Aramco’s KASHF robot, expected to deploy in 2025, will be able to operate in both vertical and horizontal segments of wellbores.
CEO: Continental Adds Midland Basin Acreage, Explores Woodford, Barnett
2024-04-11 - Continental Resources is adding leases in Midland and Ector counties, Texas, as the private E&P hunts for drilling locations to explore. Continental is also testing deeper Barnett and Woodford intervals across its Permian footprint, CEO Doug Lawler said in an exclusive interview.
Sinopec Brings West Sichuan Gas Field Onstream
2024-03-14 - The 100 Bcm sour gas onshore field, West Sichuan Gas Field, is expected to produce 2 Bcm per year.