The oil market has climbed above $65 a barrel for the first time since 2015, boosted by the closure of the UK’s biggest oil pipeline that has cut North Sea supplies at a time when Opec’s output cuts with Russia have already spurred a robust rally in crude prices this year. Now, as the industry approaches 2018, the outlook remains clouded in uncertainty as supplies, led by a resurgent US shale industry, are forecast to climb sharply while Opec’s alliance with Russia may come under strain as the world’s biggest producers look to eventually bring production back online. As the oil market awaits 2018, here are the five factors to watch:
1. Forties pipeline system As the conduit for 40 percent of oil and gas supplies from the UK North Sea, the shutdown of the 400,000 barrel a day line has forced operators at up to 85 fields to curtail production. While the UK is a relatively small oil producer at the global level, a 400,000 b/d drop in supplies is almost equivalent to how much oil Saudi Arabia, the world’s largest exporter, has been assigned to cut as the de facto leader of Opec. Share this graphic As North Sea Brent, the international benchmark, is underpinned by supplies from fields affected by the outage, the market has been quick to react. Olivier Jakob at Petromatrix says it was a “serious supply disruption” likely to upend global flows. “The disruption to Forties is not just about missing barrels, it is also about the losing a key component