Oil Rises as US Inventories Fall and UK Suffer Outage

Oil prices rose on Thursday after a power outage closed the UK’s largest oilfield and following data showing a fall in crude inventories and strong demand from refineries in the United States.

Brent crude for August LCOc1 was up 80 cents at $57.85 a barrel by 1320 GMT. U.S. light crude CLc1, also known as West Texas Intermediate or WTI, was up 50 cents at $51.91.

Britain’s Buzzard oilfield, the most important source of crude oil underpinning the global benchmark Brent, was closed after power supplies failed, traders said.

It normally pumps 170,000 to 180,000 barrels per day (bpd) but went down in the early hours of Thursday, traders said.

A spokeswoman for Buzzard operator Nexen, a unit of China’s CNOOC (0883.HK), declined to comment.

“There was a trip last night,” said one crude oil trader, who declined to be identified.

Buzzard is the single biggest contributor to the Forties crude stream, one of four crude grades underpinning the price of over-the-counter Brent, which is linked to Brent futures.

Brent’s front-month August futures contract, due to expire later on Thursday, moved to a premium of 30 cents a barrel above the September contract on the Buzzard news, its highest premium for more than two months.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza