Mubasher: Oil prices levelled up by more than 1% on Wednesday, encouraged by the shutdown of Britain’s largest North Sea oilfield for repairs, along with expected supply cuts by the Organization Of The Petroleum Exporting Countries (OPEC).
By 6:07 am GMT: US West Texas Intermediate (WTI) crude futures added 1.3% to $52.24 per barrel (pb), while International Brent crude oil futures advanced by 1.3% to $60.99 pb.
The Buzzard oilfield, whose production capacity amounts to around 150,000 barrels per day (bpd), has temporarily shut down after the discovery of pipe corrosion. This led to cancel three cargoes due to load in December, trade sources told Reuters.
“The shutdown...is reducing supply of a North Sea crude that helps set global prices,” Sukrit Vijayakar, director of energy consultancy Trifecta, said.
In spite of today’s hike, oil prices have still slashed around 30% in value since early October, dragged down by an emerging supplies, along with a widespread weakness in financial markets.
The producer club’s meeting on 6 December to discuss output policy will follow a gathering by the Group of 20 (G20) nations in Argentina this weekend. The China-US trade dispute and oil policy are expected to the agenda of the G20 meeting.
Although most analysts forecast the OPEC meeting to decide some form of supply cut, sentiment in oil markets remains negative.
“Options traders remain focused on downside risks following a 30 percent slide in WTI,” Erik Norland, senior economist at commodities exchange CME Group said in a note.
A higher number of traders have placed positions that would profit from a further decline in crude prices than those placing bets on a rising market, Reuters reported, citing Norland as saying.
In a related note, the World Trade Organization (WTO) said on Tuesday, that “trade growth is likely to slow further into the fourth quarter of 2018”, with growth is on pace to hit its slowest level since October 2016.
By 7:58 am GMT, US Nymex crude futures climbed 1.57% to $52.37 pb, while global benchmark Brent futures rose 1.43% to $61.07 pb.
