Oil prices rose July 16 after a power outage closed the U.K.’s largest oil field and following data showing a fall in crude inventories and strong demand from refineries in the U.S.
Brent crude for August was up 80 cents at $57.85 a barrel by 13:20 GMT (8 a.m. CT). U.S. light crude, also known as West Texas Intermediate or WTI, was up 50 cents at $51.91.
Britain’s Buzzard oil field, the most important source of crude oil underpinning the global benchmark Brent, was closed after power supplies failed, traders said.
It normally pumps 170,000 to 180,000 bbl/d but went down in early July 16, traders said.
A spokeswoman for Buzzard operator Nexen, a unit of China's CNOOC, declined to comment.
“There was a trip last night,” said one crude oil trader, who declined to be identified.
Buzzard is the single biggest contributor to the Forties crude stream, one of four crude grades underpinning the price of over-the-counter Brent, which is linked to Brent futures.
Brent’s front-month August futures contract, due to expire later on Thursday, moved to a premium of 30 cents a barrel above the September contract on the Buzzard news, its highest premium for more than two months.
U.S. crude inventories fell by 4.3 MMbbl last week, according to the Energy Information Administration (EIA), as refineries boosted throughput to a record level.
The data suggested demand in the U.S., the world’s biggest oil consumer, was holding up well and still absorbing fuel at a time of ample global production.
Olivier Jakob, head of Swiss energy consultancy Petromatrix, said U.S. oil demand remained strong, driven by gasoline consumption, which was helping keep U.S. refineries working at full tilt through the northern hemisphere summer.
But the market might not be quite as well balanced later in the year, when maintenance shuts some refineries.
“U.S. crude oil stocks are still at a high level and at risk of seeing increasing builds once refineries go into maintenance in the fall,” Jakob said.
Oil prices have fallen steadily over the last two months and both crude benchmarks are down more than 15% from June peaks.
The Organization of the Petroleum Exporting Countries is now producing about 2.5 MMbbl/d more crude than needed, analysts say, filling inventories worldwide.
OPEC oil supply may be about to rise as Iran increases output following a deal with six global powers over its nuclear program.
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