Oil Futures Approaching 2 ½ Year Highs
Crude Oil futures are pushing up near 2-½ year highs during early Tuesday trading, possibly supported by a continuing outage in the North Sea. Speculators have been keeping a close eye on the outage of the Forties Pipeline System in the North Sea. A crack in the line has ceased the flow of 450,000 barrels a day earlier this month. The line isn’t expected to be back to usual operations until sometime after the New Year.
If prices stay steady, we will end the year near the highest levels we’ve seen since July of 2015. Most of the fundamental support for the higher prices we saw in 2017 seem to have come from almost constant supply disruptions, and efforts by members of OPEC and other major producers like Russia to curb production. At the same time, we also saw strong growth in U.S. shale output, taming some of the gains.
OPEC previously agreed in November to extend production cuts through 2018, as it looks at lowering global stocks. Meanwhile, U.S. shale production hit a record high of 9.789 million barrels a day in December, according to the EIA.