Brent crude was up 64 cents, or 1%, at US$63,98 a barrel by 04h13 GMT.
Kilduff was referring to the shutdown by Ineos of the North Sea pipeline due to cracks that are expected to take anywhere from several weeks to a month to fix, thus potentially removing as much as much as 13 million barrels of crude from the market. It's expected to be down several weeks. "We can confirm that formal Force Majeure has been declared on relevant contracts". All the results of the outage are seen as helping OPEC in its mission to reduce global inventories.
"After the initial surge that understandably accompanies such a major supply disruption, the market has settled down again and, unless another dramatic event occurs in what remains of 2017, it looks as if the Brent crude price will average about US$54 a barrel for the year, an increase of twenty percent on 2016".
INEOS told clients on Tuesday it expected any fix work to last at least two weeks.
At the same time, OPEC is upbeat about the massive drawdowns in recent months.
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"We see the spate of supply projects, excluding OPEC countries and the developments in USA shale, taking their toll on the market and keeping prices in check next year", analysts at consultancy JBC Energy wrote in a note.
Now the Forties pipeline shutdown is tightening further the market in Europe, and traders have started scrambling for cargoes of medium sour blends instead, trading sources tell Platts. Russia's Urals and the UAE's Murban are some of the alternatives to Forties in terms of similar quality.
The front month of the USA crude curve for February and March remains in backwardation.
The Forties outage is also creating a strong backwardation in the near months. The halt to the Forties pipeline because of a crack caused Brent to touch a two-year high during the week, pulling the USA benchmark with it. Early on Thursday, the Brent premium over WTI was just below $6 a barrel.
Swiss-based chemicals company INEOS, which owns the Forties Pipeline System, said on Wednesday that it has not yet taken a decision on repairing a pipeling crack that materialised during a routine inspection of onshore infrastructure last week. This outage may accelerate the pace of shrinking global inventories and give OPEC's efforts an unexpected boost.