Oil falls as North Sea supply restarts
By Sara Israfilbayova
World oil prices are falling, investors continue to win back forecasts of a record increase in production of raw material in the U.S.
Brent crude futures dropped 58 cents to $64.93 a barrel, having hit a 2018 low of $64.77 earlier, U.S. West Intermediate Texas (WTI) futures fell 48 cents to $61.31 a barrel, according to Reuters.
On February 6, in its monthly short-term forecast, EIA announced that it expects oil production in the U.S. in 2018 at a record level of 10.6 million barrels per day. In January, the department expected production of 10.3 million barrels.
At the same time, according to the U.S. Energy Department, commercial oil reserves in the U.S. (excluding the strategic reserve) for the week ended on February 2, increased by 1.9 million barrels, or 0.5 percent - to 420.3 million barrel. Oil production in the U.S. for the week, according to the department, also increased - by 3.3 percent, or by 332,000 barrels per day, to 10.251 million barrels per day.
Traders also win back reports of the launch of the Forties pipeline, which was closed on February 7 due to the closure of the valve at one of the sections of the pipeline in Scotland. Earlier, the pipeline was closed due to a breakdown in mid-December.
FPS pipelines transport raw materials from 85 fields in the central and northern parts of the North Sea, as well as from several deposits in Norway from approximately 40 companies. The FPS capacity is 575,000 barrels of oil per day.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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