Production outage in North Sea leads to rising Brent price

Brent is trading largely unchanged at a good $57 per barrel following the contract rollover. It was particularly the (meanwhile expired) August contract which rose significantly yesterday in response to a production outage at the Buzzard oilfield in the North Sea. 

The North Sea oil type Forties is produced at the Buzzard field - this is the most important of the four oil types which determine the Brent price. As a result, the front end of the Brent forward curve was in backwardation yesterday for the first time in roughly a year. The forward curve is back in its familiar contango structure today, however. 

A glance at the WTI price reveals that yesterday's strength in the Brent price was attributable to this special factor, WTI has fallen further and at $51 per barrel is trading close to a three-month low. 

"The Brent price should likewise decrease again once the problems at the Buzzard oilfield have been resolved", says Commerzbank.