Oil, Gas Firms Could Lose Millions Due to Forties Pipeline Shutdown

Some North Sea production has been halted and there are concerns for the security of Britain’s gas supplies

Some North Sea production has been halted and there are concerns for the security of Britain’s gas suppliesIAIN MASTERTON ALAMY

Brent crude was up 64 cents, or 1%, at US$63,98 a barrel by 04h13 GMT. It had settled down $1.35, or 2.1 percent, on Tuesday on a wave of profit-taking after the North Sea pipeline shutdown helped to send the global benchmark above $65 for the first time since mid-2015.

Brent crude futures, the worldwide benchmark for oil prices, were at $62.84 a barrel, up 40 cents, or 0.6 percent from their last close.

The pipeline carries 450,000 barrels per day (bpd) of Forties crude oil, roughly equivalent to a quarter of the daily output of the entire North Sea basin, and handles a third of Britain's total offshore gas production.

A spokeswoman for Nexen said today: "Due to the shutdown of the Forties pipeline Nexen has taken a safe, temporary shutdown of production on our Buzzard and Scott facilities".

Total also produces about 55,000 bpd of oil from the field.

"The shutting down of the Forties pipeline does cause significant issues for our industry, financially, operationally and commercially", she said in a statement.

While the Forties shutdown has provided a price floor, early gains quickly evaporated in a global market that is still oversupplied and with output rising in the United States.

Another cap on prices has been soaring US oil production, which has risen by 16 percent since mid-2016 to 9.78 million barrels per day, the highest since the early 1970s and close to levels from top producers Russian Federation and Saudi Arabia.

After settlement on Tuesday, industry group the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week.

Oil markets rose on Thursday, lifted by a fourth straight weekly fall in USA crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week.

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