WTI-Brent Crude Spread Snaps After Forties Pipeline Closure For "Weeks, Not Days"

Following the discovery of a "small hairline crack" in The Forties Pipeline System - one of the most important oil conduits in the world - its operator Ineos has decided a total controlled shutdown "for weeks, not days" is the safest option. This has sent the spread between WTI and Brent soaring...

 

A “small hairline crack” was discovered during a routine inspection last week by Ineos contractors, just south of Aberdeen in Scotland. The pipeline’s pressure was reduced for a full assessment but during that time the crack extended.

As Bloomberg reports, Brent futures rose as much as $1.18 to $64.71 a barrel in London - the highest since June 2015...

“Despite reducing the pressure the crack has extended, and as a consequence the Incident Management Team has now decided that a controlled shutdown of the pipeline is the safest way to proceed,” Ineos said in a statement.

 

“This will allow for a suitable repair method to be worked up.”

The pipeline system feeds crude to the Hound Point export terminal near Edinburgh in Scotland.

At over 400,000 barrels a day, the supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.

Comments

John Kerry-Heinz Countrybunkererd Mon, 12/11/2017 - 12:38 Permalink

Holy Shite.  Check out what the petrodollar Central Banksters have hatched as an alternative to Bitcoin and the Petro-Yuan\Ruble crowd.  Desperation must be through the roof at HQ’s.  Gonna need way more Zoloft ova der. OilCoin: The World’s First Compliant Cryptocurrency https://oilprice.com/Energy/Crude-Oil/OilCoin-Worlds-First-Compliant-Cryptocurrency.html

In reply to by Countrybunkererd

MrSteve Mon, 12/11/2017 - 11:28 Permalink

The last thing Great Britain needs right now is to have the oil shut off, in the teeth of an icy blizzard. And who supplied the pipe?

HarryKallahan Mon, 12/11/2017 - 11:36 Permalink

....A small hairline crack... It can't be that small or they never would have found it.And it's getting longer as they decrease the pressure."Small" cracks can be welded in a few hours.  This is closed for "weeks.". 

SubjectivObject HarryKallahan Mon, 12/11/2017 - 12:48 Permalink

cracks have a unique importance for pressure pipeline integritytiny cracks can look like barn walls to shear wave UTa hairline morphology suggests a stress corrosion cracking mechanism; never just one roach theretime to fix may depend on location; e.g.: under a river crossing may be problematic for short schedulesbefore you "weld the crack" you find out why you have the crack"weld" repair for even a small flaw/defect may be a cylindrical section of pipe.etc.

In reply to by HarryKallahan

adr Mon, 12/11/2017 - 11:33 Permalink

400k barrels offline can move the price of a few hundred million? yeah that makes sense.OH NO!!!! 400k BARRELS A DAY ARE GOING TO GO OFFLINE FOR A FEW DAYS WHILE A CRACK IN A PIPE IS REPAIRED WHEN THE GLOBAL MARKET IS OVERSUPPLIED BY MILLIONS OF BARRELS!!!!!!!So my gasoline will go up because of a pipeline crack that has absolutely no bearing on the market that supplied my gas, awesome.

BritBob Mon, 12/11/2017 - 11:34 Permalink

Falklands oil - worth a punt?By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016). But what is the truth...Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-The_UN_CLCS_Commission 

king leon Mon, 12/11/2017 - 11:56 Permalink

The Brent oilfield has been pumping oil to the UK for about 45 yrs . At the moment they are pumping only 400.000 barrels per day, we are paying £5.40 per gallon(imperial). Brexit is going to cost us £ 50 Bn severance  to compensate the EU . FFS, we should own the fucking EU.

Easyp Mon, 12/11/2017 - 12:00 Permalink

So buy oil from the Arabs or the Norwegians ffs!  This outage is small beer but is being used to bump up the futures market.

hibou-Owl Mon, 12/11/2017 - 13:09 Permalink

Weeks to fix a 15 cm crack, and they say no leakage occurred.Something doesn't add up.Note: Pipeline has only recently been sold,  Yippee! 

Expat Mon, 12/11/2017 - 13:35 Permalink

"Snaps"  "Soaring".  LOL.  More bullshit clickbait headlines. 99% of the readers here have no fucking clue what the Brent-WTI spread even is, why it is negative or why this $1.50 a barrel move is peanuts compared to the past ten years.