Global oil prices extended gains Tuesday after the operator of the Forties Pipeline System made no changes to the repair time estimate for the pivotal North Sea conduit.
"Repairs are progressing well and a number of options are currently being developed," Ineos Group, which operates the pipeline system, said in a statement. "The custom parts necessary for some of these options have now been fabricated and are being delivered to the site over the coming days as we progress the preferred method of repair from today."
"At this stage it is still too early to say exactly how long the repair will take to complete, and there is no change to the previously indicated timescale of two to four weeks from 11th Dec.," the company noted. "We will work to complete this as quickly as possible but safety is our highest priority."
Brent oil prices for February delivery were marked 0.3% higher at $63.60 following the statement, while February delivery prices for West Texas crude rose 0.5% to $57.44 per barrel. The moves, however, narrowed the spread between the two benchmark to around $6.14, around $1 lower than the two-and-a-half year high it touched when the Forties System shutdown was first reported last week.
The Forties Pipeline System suffered a hairline crack last week and was fully shutdown on Dec. 11, halting the deliver of around 450,000 barrels of oil and gas each day to the norther coast of Scotland. The shutdown will impact that largest input into the so-called 'dated Brent' crude mix that is used to settle around half of the worlds' crude contracts.
Global prices have also found support from last month's agreement between OPEC producers and non-member allies to continue limiting output by 1.8 million barrels a day until the end of next year. That has pushed domestic supplies around the world, especially in the United States, consistently lower.
The American Petroleum Institute will publish details on U.S. crude stocks later today, with official figures from the Energy Information Administration set to follow on Wednesday.
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