Brent crude oil prices jumped – by one percent – above $65 per barrel on Tuesday to their highest since mid-2015, after the shutdown of the Forties North Sea pipeline knocked out significant supplies from a market that was already tightening due to OPEC-led production cuts.
Brent crude futures LCOc1, the international benchmark for oil prices, were at $65.32 a barrel at 07:48 GMT, up 63 cents, or one percent, from their last close. The contract hit a high of $65.70 a barrel earlier in the day.
That marks the first time Brent has risen above $65 since June 2015.
US West Texas Intermediate (WTI) crude futures CLc1 were at $58.38 a barrel, up 39 cents, or 0.7 percent, from their last settlement.
“Brent crude raced higher … as news broke that the North Sea’s Forties Pipeline system would have to be shut down for a ‘number of weeks’ after a hairline crack was found in it,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. “The pipeline … is a significant component underpinning the Brent benchmark.”
Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed.
“The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank.