As refineries in Texas reopen after last week’s freeze, concerns about OPEC + willingness to continue production cuts are growing, with Brent global benchmark closing lower Thursday .
Oil prices were mixed on Thursday with the U.S. crude margin rising to its highest level since 2019 as U.S. refineries in Texas resumed production after last week’s freeze, while Brent reduced concern that four months of gains will encourage producers to drive productivity.
Earlier in the day, confirmation that U.S. interest rates remained low – coupled with a sharp fall in U.S. crude output last week due to a winter storm in Texas – helped boost momentum. both US crude and Brent to their highest intraday prices since January 2020.
Brent global benchmark futures for delivery in April fell 16 cents, or 0.2 percent, to settle at $ 66.88 a barrel. April Brent’s contract expires on Friday.
U.S. West Texas Intermediate (WTI) crude, meanwhile, ended 31 cents, or 0.5 percent, higher at $ 63.53, the highest close since May 2019.
Analysts said WTI increased late in the day as more refineries in Texas began to return to service, including the Port Arthur plant at Valero Energy Corp and the Corpus Christi plant at Citgo Petroleum Corp.
The frost caused a fall in U.S. crude output of more than 10 percent, or one million barrels per day (bpd) last week, while refinery runs fell to levels not seen since 2008, he said. Energy Information Management.
“The more refiners return to service, the more crude oil they burn through, and the less crude oil goes into storage,” said Bob Yawger, director of energy futures at Mizuho Americas in New York.
Overall, however, analysts noted that price gains were slowing on Thursday.
“With a move appearing to slow down a week before the next OPEC + meeting, crude could set for a small correction,” said Craig Erlam, OANDA senior analyst, adding “There are plenty of risks down in the market and OPEC + is one of them unity coming under pressure in the coming months. ”
The Organization of Petroleum Exporting Countries and its allies including Russia, a group known as OPEC +, are expected to meet on March 4th.
Analysts noted that recent higher oil prices – both Brent and WTI have gained more than 75 percent over the past four months – could encourage U.S. producers to return to source and OPEC + to release their production reductions.
The group will discuss a slight easing of oil supply loops from April due to price avoidance, OPEC + sources said, although some are proposing to remain stable for now as there is a risk of lumps new barriers in the battle against coronavirus pandemic.
Further voluntary cuts by Saudi Arabia in February and March have tightened global supply and boosted prices.
At the same time, assurances from the U.S. Federal Reserve helped that low interest rates for some time help support oil prices earlier in the day and should increase investor risk appetite and global equity markets.