A shutdown of Britain’s Forties North Sea pipeline on Monday sent Brent crude oil prices above the $65 per barrel mark on Tuesday for the first time since June 2015. The pipeline, which is responsible for 450,000 barrels per day, was closed after cracks were detected. Brent crude was trading at $65.68 per barrel as of 1:45 p.m. HK/SIN, a 1.50 percent rise, while U.S. WTI crude was trading at $58.45 per barrel, a 0.79 percent gain.
U.S. production increased continues to send the price of oil lower despite some moves to the upside and to compromise OPEC’s efforts to control prices. U.S. production has grown by over 15 percent since the middle of 2016, to 9.71 million barrels per day, levels not seen since the early 1970s.
Currency Movements
The dollar struggled on Tuesday, trading lower against its primary trading partners. The dollar index (.DXY), the measure of the greenback’s strength relative to its primary trading partners, is currently down around 8 percent for the year. The dollar was marginally lower against the euro, trading at $1.1775, and it was down 0.08 percent against the yen to trade at 113.46, still higher than lows near 110 hit in late November.
Trading volumes were thin on Monday and are expected to remain lower than usual on Tuesday as well, as traders sit back and wait for the Federal Reserve’s two-day policy meeting which will begin today, and to continue refining their end-of-year trading strategies. Analysts are questioning whether there will be a move for four interest rate hikes in the U.S. in 2018 instead of the three originally predicted.