Brent underpinned by pipeline outage in the North Sea
West Texas Intermediate crude oil for January delivery CLF8, +0.44% the U.S. benchmark, declined 14 cents, or 0.2%, to end at $57.16 a barrel after earlier trading as high as $57.78.
Brent oil for February LCOG8, +0.25% the global benchmark, gained 18 cents, or 0.3%< to close at $63.41 a barrel.
The moves mirrored a mixed session on Friday, when WTI rose 0.5%, but Brent shed 0.1%.
There was no clear catalyst for the turn lower for WTI. Analysts noted that Nigerian oil workers suspended a strike, according to Bloomberg, agreeing to reopen negotations with management next month. Position squaring ahead of the expiration Tuesday of the January WTI contract may have played a role, traders said.
U.S. futures had already turned lower when the U.S. Energy Information Administration forecast crude production from seven major shale regions would grow by 94,000 barrels a day in January.
The earlier optimism for the U.S. benchmark came after Baker HughesBHGE, +2.54% reported that the number of active U.S. rigs drilling for oil was down 4 at 747 last week, breaking a three-week string of rising rig numbers. A drop in rigs implies a slowdown in drilling activity, which is usually boost oil prices.
Brent was underpinned by the closure of North Sea Forties pipeline due to a power outage.
“The outage of the North Sea’s most important oil and gas pipeline is continuing to lend support,” analysts at Commerzbank said in a note.
“As a result, there is currently a lack of a good 400,000 barrels per day of Forties oil, the leading oil type in the Brent basket. This should preclude any fall in the Brent price for the foreseeable future,” they added.
Natural gas NGF18, -0.11% jumped 5.1% to $2.745 per million British thermal units, rebounding from a nearly 10-month closing low set Friday. The bounce came after forecasts were revised to show much colder than previously expected temperatures across much of the U.S. in the latter part of this month and early January, according to analysts at TFS Energy.