Oil quotations rose Monday, reversing earlier declines, after a North Sea channel on the way shut for repairs and investors focused on commodities following an explosion in New York.
U.S. West Texas Transitional (WTI) crude futures ended Monday’s session up 63 cents, or all but 1.1 percent, to $57.99 a barrel.
Brent crude futures, the global benchmark for oil prices, touched a 2½-year high of $64.93, before easing to profession up $1.22, or 1.9 percent, at $64.61 a barrel at 2:26 p.m. ET (1926 GMT) .
The unlikeness between the two grades was the largest since late October, as Brent turn for the bettered after the shutdown of the pipeline that carries the largest grade of North Sea unsophisticated oil.
The pipeline, which can carry 450,000 barrels per day of Forties crude from the North Sea to the Kinneil development terminal in Scotland, has been operating at reduced capacity for about four primes before the shutdown.
“It is a supply concern not only because the pipeline forwards a significant portion of North Sea crude oil output, but also because it may require weeks before the issue is resolved,” said Abhishek Kumar, Chief Energy Analyst at Interfax Energys Global Gas Analytics in London.
The exchange had expected the pipeline to return to service quickly and was surprised by the extended shutdown, said John Kilduff, colleague at Again Capital LLC in New York.
“It’s a significant amount of crude oil in a market that has been the come biest for crude oil,” Kilduff said.
Earlier in the session, both benchmarks popped luxurious after an explosion on Monday rocked New York’s Port Authority Bus Terminal, one of the bishopric’s busiest commuter hubs.
Investors tend to head for hard-asset commodity deal ins like gold and silver during high-risk events, and oil can also lure investment, Kilduff said.
Brent and WTI have gained well in excess of a third from 2017 lows, drawing support from a cut in formation by the Organization of the Petroleum Exporting Countries and a group of non-OPEC producers, embracing Russia, which has been in place since the start of the year.
During the weekend, Kuwait’s oil ambassador suggested that an exit from the supply-cut agreement would be intentional before June.
The United Arab Emirates’ energy minister said on Monday that OPEC maps to announce in June an exit strategy from the cuts, though he added it did not express the pact would end by then.
Gains from the cuts could also be undermined by react to output from the United States, which is not participating in the deal to check production.
The number of rigs drilling for new oil output in the United States arise by two in the week to Dec. 8, to 751, the highest since September, energy military talents company Baker Hughes said on Friday.
“The largest concern for investors currently leftovers the rise in the U.S. rig count,” said Shane Chanel, equities and derivatives cicerone at ASR Wealth Advisers.
A higher rig count points to a further rise in U.S. blunt production
That’s the richest since the early 1970s, and close to the output levels of top producers Russia and Saudi Arabia.
— CNBC’s Tom DiChristopher provided to this report.