Oil treading water even as Forties pipeline system returns to life

Dec. 28 (UPI) -- Oil prices started the trading day Thursday in static territory after pipeline operator Ineos said restrictions on a major North Sea network were lifted.

"All restrictions on the flow of oil and gas from platforms feeding into the pipeline system have been fully lifted," the company said in a statement. "All customers and control rooms have now been informed."

The Forties pipeline system, which carries about 40 percent of the oil and natural gas produced in the North Sea, was closed Dec. 11 after a hairline crack was discovered inland near Aberdeen, Scotland. Ineos said the line is repaired and the system should be back to normal as early as next week.

The price of crude oil was more or less unmoved moments before the opening bell for what's expected to be a light trading day on Wall Street ahead of another long holiday weekend. The price for Brent crude oil, the global benchmark, was down 0.06 percent at 9:26 a.m. EST to $65.96 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.1 percent to $59.58 per barrel.

The gradual restart of the Forties system was balanced by China's growing appetite for oil. While driving for a greener economy, the world's second largest economy behind the United States is on pace to set a record for oil imports next year, according to Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago.

Flynn said next year is setting up for a tighter market, which could support a stronger rally for crude oil prices. In the United States, the American Petroleum Institute reported a big drop in domestic crude inventories, suggesting the domestic market is balancing out.

"That was the sixth drop in a row," Flynn said in commentary emailed to UPI. "What tempered some of the bullish impact from that drop was a reported 3.1 million barrel increase in gasoline supply."

The gain in gasoline inventories could be indicative of demand. The U.S. Commerce Department reported Friday that consumers were spending more than they made in November. For consumer needs, energy prices are increasing more than most other staples.