A hurricane is shutting down Texas and oil prices are soaring to a one-year high – gas and oil

If there was anything “missing” for the rescue and health services in Texas in the US, one of the states hardest hit by the epidemic, it was the severe storm and cold that brought with it and hit the country hard. How severe? The storm, talked about on a historic scale, led to an almost complete collapse of infrastructure Electricity is the second largest state in terms of area – after Alaska – and second in population only to California. Just to be clear, Texas has 4 of the 20 largest cities in the U.S., with Houston, the largest city in the state being the 4th largest in the U.S. Million inhabitants – which is more than the entire population of Australia.

So while health services are shaking their heads, with Texans running out of electricity and being called upon to boil water and expect further damage to the power grid, as politicians clash with accusations over who is responsible for the default, oil prices – Texas is one of the world’s leading players in the world – continue to rise. From the vast reservoirs in the country.

Moreover, the storm struck 40% of oil production, which is expected to push up the price of the goods. Currently, there is a cut of 3 million barrels daily in oil production, which accounts for 27% of total U.S. oil production. By comparison, in January the U.S. produced 11 million barrels per day.

As of this writing, the futures contract price for crude oil (WTI) is $ 61.3 a barrel. At the daily high, he scratched the $ 62 mark. In general, since the end of October, when the contract price stood at $ 35.8, crude oil made a rally of 71%.

What about Brent crude you ask? His well-being, or at least its price, is excellent. At its daily high, it reached $ 65.4 a barrel. As of this writing, the price stands at $ 64.5 per barrel. Like the WTI, Brent has made a 72% rally since the end of October.

The balance in the price relative to the last year is due to the austerity policies adopted by the OPEC countries – the global oil cartel led by Saudi Arabia – and also the OPEC + countries led by Russia. This is after in January last year, at the beginning of the corona crisis, a price war broke out between the countries. What happened was that Russia refused to cut back and in return Saudi Arabia removed all restrictions and began pumping oil unconsciously.

Increased pumping coupled with a sharp drop in demand due to global closures, led to a fall in futures on commodities to minus $ 38 in April, after all warehouses were full to the brim and ships were forced to function as floating warehouses. They eventually “balanced” at $ 11 a barrel – but that April hit still resonates in the industry and will continue to resonate for a long time to come.

The balance since last October, which in recent weeks brought the level of early January 2020 – when the Iranian Revolutionary Guards commander, Qassem Suleimani, was eliminated and brought regional tensions to a peak – indicates that the industry has managed to find the delicate line between supply and demand.