Oil moved lower approaching $65 per barrel Tuesday, but stayed within sight of its highest point since the middle of 2015, as the restart looms of an important oil pipeline in the North Sea that offset support from supply cuts led by OPEC.
The North Sea Forties pipeline plays a big role in the worldwide oil market and is being tested after repairs and a full flow is expected to resume in the first few days of January, said Ineos it operator on Monday.
Brent crude, the benchmark internationally for oil prices, was down 19 cents early Monday sitting at $65.06 per barrel. Prices were as high as $65.83 December 12, which was the highest since June of 2015. U.S. crude fell 10 cents and was at $58.37.
One analyst said that the confirmation Forties was coming back was the biggest development for the long holiday weekend, for sure, added the analyst it could cap the price for Brent.
Activity on the trading board remained thin because of the Christmas holiday that continued in several countries. Brent has increased by 17% during 2017. OPEC and Russia as well as other non-member exporting countries have cut output since January 1 to eliminate the worldwide oil glut.
Producers extended the agreement to cut supply through the end of 2018.
The oil minister of Iraq said Monday there would be a balance of supply and demand during the first quarter of 2018, leading to an increase in price. Global inventories of oil have dropped to levels that are acceptable, he added.
The prediction by the oil minister from Iraq is earlier than OPEC predicts. The oil cartel latest forecast calls for the market to be balanced near the end of 2018.
While the action taken by OPEC has given support all year to oil prices, the shutdown that was unplanned for the Forties pipeline December 11 pushed Brent prices to levels of the middle of 2015.
Forties has an important role for the global market. It is the largest of the five crude streams in the North Sea underpinning Brent, which is the benchmark crude for oil trading for Europe, Asia, Africa and the Middle East
Production increases in the U.S. have offset some of the cuts led by OPEC.
The rig count in the U.S., an early output indicator for the future held steady during the week at 747 through December 22.