Oil prices inched up on Wednesday, supported by expectations of a fall in US crude inventories and by the ongoing outage of the North Sea Forties pipeline system.
US West Texas Intermediate (WTI) crude futures were at $57.73 a barrel at 0312 GMT, up 17 cents, or 0.3 per cent, from their last settlement. Brent crude futures, the international benchmark for oil prices, were at $63.91 a barrel, up 11 cents, or 0.17 per cent.
“Oil prices inched higher on expectations of another strong drawdown in U.S. inventories,” ANZ bank said.
The American Petroleum Institute had said on Tuesday that US crude inventories fell 5.2 million barrels in the week to December 15 to 438.7 million. Official US government data from the Energy Information Administration (EIA) is due on Wednesday.
Forties pipeline shutdown
Oil prices have also been supported by the continuing outage of the Forties pipeline in the North Sea, which delivers crude underpinning Brent futures. Operator Ineos hopes to be able to fix a crack in the pipeline, which can pump around 450,000 barrels per day of crude, within two to four weeks from December 11.
Despite the North Sea outage and falling US crude inventories, oil prices have remained some way off their $65.63 and $59.05 per barrel recent highs for Brent and WTI, respectively.
Traders said rising US crude production, which has soared by 16 per cent since mid-2016 to 9.8 million bpd, was capping prices. Most analysts expect US output to break through 10 million bpd soon, which would be a new record and take it to levels on par with top exporter Saudi Arabia and close to top producer Russia, which pumps around 11 million bpd.
Georgi Slavov, head of research at commodity brokerage Marex Spectron, warned of a possible slowdown in oil consumption, which could put downward pressure on oil prices into 2018.
“Demand, which was the main reason to see oil at/above $60, has weakened ... But we continue to lean towards a mildly bearish macro environment for the period (Q1 2018) on the back of an anticipated slowdown in credit, persistently bearish energy intensity of key oil consuming economies and a seasonal decline in the manufacturing activity,” Slavov said.