WTI crude closes on Brent after pipeline spill

  • WTI crude closes on Brent after pipeline spill

WTI crude closes on Brent after pipeline spill

Oil pump jacks are seen next to a strawberry field in Oxnard, California, US, February 24, 2015.

Oil prices climbed on Friday in a US holiday-shortened session, as investors were awaiting the closely-watched OPEC (Organization of the Petroleum Exporting Countries) meeting next week.

The news caused Nymex West Texas Intermediate (WTI), the USA crude benchmark, to climb 1.1% to $58.63 a barrel - its highest level since July 2015.

Analysts at S&P Global raised their expectations for Brent crude oil in 2018 to $55 a barrel on Friday.

The pipeline, owned and operated by TransCanada Corporation, runs crude oil from the Canadian sedimentary basin to refineries in IL and Texas and ruptured last week, spilling 200,000 gallons of crude in South Dakota.

WTI crude is being supported by the closure of the 590,000-barrel-per-day (bpd) Keystone pipeline following a spill last week. European Brent increased 49 cents and closed at 62.91 dollars a barrel.

PVM Oil Associates strategist Tamas Varga said the spill was helping United States crude, flipping prices into backwardation, when front-month prices rise above those for future months, indicating an undersupplied market. "Or, if we get grumblings from Iraq or Iran", he added.

Markets have also tightened globally due to output cuts since January by the Organization of the Petroleum Exporting Countries, Russia and several other producers.

Meanwhile, OPEC meets November 30 to decide whether to process with supply quotas.

However, rising USA oil production has curbed crude price gains, as it fills some of the gap left by OPEC and its allies. Recently, it was reported that US oil production jumped by 15 percent since mid-2016 to a record 9.66 million bpd, thanks largely to aggressive shale drilling.