Fall in U.S. crude stocks, North Sea outage supports prices
By David Gaffen
NEW YORK (Reuters) – Crude prices rose on Wednesday, supported by a larger-than-expected drop in U.S. inventories and the continued outage of the North Sea Forties pipeline system.
U.S. crude stocks
West Texas Intermediate crude futures
Crude stocks, excluding the U.S. Strategic Petroleum Reserve, are at 436.5 million barrels, the lowest since October 2015.
Refiners in the United States continue to run at above-average rates than is typical for this time of year, which is offsetting strong U.S. production, and resulting in product that is ready for export or domestic use.
For the most recent week, refiner capacity utilization rose to 94.1 percent, the highest since the summer, and above average for December, notes Richard Hastings, macro strategist at Seaport Global Securities in Charlotte.
Some producers, including Russia, had raised concerns over whether the deal should continue through the end of 2018. On Wednesday, Saudi Arabian energy minister </a>Khalid al-Falih said it would be premature to discuss changes to OPEC’s policy. He said the drawdown of inventories would likely take through the second half of 2018.
Rising U.S. crude production
Prices have been supported by the continuing outage of Britain’s Forties pipeline in the North Sea, which delivers crude underpinning Brent futures.
Operator Ineos said repairs were under way on Wednesday after a crack was found that closed the pipeline on Dec. 11. Repairs are expected to take two to four weeks.
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