Oil prices continue to rise today as pipeline outage takes its toll on the supplies, coupled with the increasing draw outs in oil inventories in United States.
Forties Pipeline, one of the major North Sea pipelines that underscores the Brent Crude benchmark, was shut down due to a hairline crack. The pipeline shutdown has had Brent prices soaring as the premium between Brent and WTI widens. The Management at the Forties Pipeline have informed the investors and analysts that pipeline will continue to remain shut of at least some weeks.
US inventory draws continues as American Petroleum Institute (API) reported large draws for the last few weeks. The API reported a large draw of 7.385 million barrels of crude oil, but warned of any bullish momentum as inventories saw a significant incline to 2.334 million in Gasoline.
U.S. West Texas Intermediate (WTI) crude futures were at $57.71 a barrel at 0100 GMT, up 15 cents from their last settlement.
Brent crude futures, the international benchmark for oil prices, were at $63.86 a barrel, up 6 cents.
According to industry estimates, regardless of the pipeline outage, the oil prices will have hovered around $ 65.63 and $ 59.05 per barrel for Brent and WTI respectively. Traders say that the rising US Crude production which has soared 16 percent has been capping oil prices in the current year.
US is expected to break through 10 million barrels day soon which would send US production to record levels, and take bring the US production at par with top exporters like Russia and Saudi Arabia.