ICE Brent futures rise on Norwegian oil field shutdowns

ICE Brent futures rise on Norwegian oil field shutdowns

London (Platts)--13Oct2006

ICE Brent futures were stronger Friday as the market on bullish
sentiment after Statoil and Shell announced a combined shutdown of 315,000 b/d
of crude production, brokers said.
The news came this morning after opening stronger on the back of the news
that a Louisiana natural gas pipeline caught fire Thursday after being struck
by either a tugboat or a barge.
At 1022 GMT the November ICE Brent futures contract, expiring on Monday,
was changing hands at $59.18/barrel, up 42 cents from Thursday's close.
"It's a little stronger today on the back of the shut-in and the accident
in Louisiana, but I don't think it will affect prices much more than it has.
Intermonth spreads have tightened though with December-January up about 10
cents today," a London based broker said.
Statoil and Shell are shutting down three Norwegian oil fields totalling
315,000 b/d following an order from Norway's Petroleum Safety Authority to fix
a number of unsafe lifeboats, the companies said Friday.
The two companies received a letter from the safety regulator Thursday
ordering them to shut in production at Statoil's Snorre and Shell's Draugen
fields until the faulty lifeboats had been upgraded, but the companies had
hoped to resolve the issue in talks early Friday.
"Both fields will be now shut down by the end of the day and we are
saying we expect to complete repairs to the six lifeboats (on the Snorre
platform) within seven to ten days," a Statoil spokesman said.
Production form Statoil's 85,000 b/d Vigdis field is transported through
the Snorre platform and is also affected.
Late Thursday, a Louisiana natural gas pipeline that caught fire Thursday
after being struck by either a tugboat or a barge. The pipeline is a lateral
owned and operated by Chevron, John Kilgallon, a spokesman for West Cote
Blanche Bay field operator Gulfport Energy, told Platts.
"The news from Louisiana has added a few cents to the price, but nothing
spectacular," a trader said.
Gulfport in a separate statement Thursday confirmed the fire, north of
its West Cote Blanche Bay production facilities, and said it had shut the
field as a precaution. The accident involved two contracted vessels working in
the field, Gulfport said.
According to the Louisiana State Police and the US Coast Guard earlier
Thursday, the high-pressure gas pipeline exploded and caught fire after being
struck by a work barge. The state police said the accident caused one fatality
and multiple injuries.
On a technical note brokers said that prices throughout the week have
been mainly moved by day traders quite frequently "selling the rallies."
Market players also said that currently front-month Brent crude has been stuck
in a $2 range and for there to be any significant change the contract needs to
settle either below $57.50 or significantly above the $60 levels.
--Jean-Luc amos; jean-luc_amos@platts.com

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