Tue 19 Dec 2017 07:41

Brent remains in the mid-$63s


By A/S Global Risk Management.



News of oil workers' strike in Nigeria, drop in U.S. oil rigs, Forties outage support prices.

Earlier this month, we saw Brent prices nearly touching 61$, but then came news of the north western European Forties pipeline closing due to a damage, and prices inched towards $66. Yesterday saw very low volatility as the market seems to be coping with the shock. But likely the closure is still holding a hand under prices. The pipeline will likely not be running for another 1-3 weeks.

So, what could affect the price during this week? A Nigerian oil union just began an indefinite strike yesterday. Nigeria produces 1.69 mbdp, and it is possible that some of this supply could be endangered. But currently there is no information on if and how many barrels are affected. This event, though, is less likely to cause substantial volatility.

Also, most likely the market will be looking at API inventory count later today, and those of EIA tomorrow.

The year is coming to an end, and some of the large banks are publishing their forecasts of the Brent price next year. Most of the banks are bullish as they raised their forecasts.


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