On Monday, the price of oil was pushed higher by a North Sea pipeline outage along with a Nigerian oil worker strike. The decrease in U.S. rigs drilling for oil also supported prices, although the growth in U.S. crude output dampened the market.
Brent crude futures at 1203 GMT were at $63.37 a barrel, up 14 cents from the last close. U.S. West Texas Intermediate crude futures were at $57.49 a barrel, an increase of 19 cents.
The Brent benchmark had traded at $63.91 earlier in the day, but the contract dropped its earlier gains following Ineos, the operator of the closed North Sea Forties pipeline, saying that the crack responsible for its shut down had not spread. The Forties pipeline is the link which provides a portion of the physical crude supporting Brent has been shut since Dec. 11, which has obliged the operator to declare force majeure on all oil and gas shipments.
“The declaration of force majeure highlights the seriousness of this,” said Bjarne Schieldrop, chief commodities analyst, adding that an extension of the outage would continue boost prices.
A strike by Nigerian oil workers raised concerns over exports as well. The Petroleum and Natural Gas Senior Staff Association of Nigeria, whose members work in the oil industry, began a strike on Monday after coming to a deadlock with the government agency.
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As for the United States in the week ended Dec. 15, energy companies reduced the amount rigs drilling for the first time in six weeks to 747, according to an energy services firm. Regardless of the cut, activity remains above this time last year, when the rig count was under 500. U.S. output is moving towards that of top producers Saudi Arabia and Russia. This has dented the efforts by the Organization of the Petroleum Exporting Countries and as well as producers including Russia to withhold production.