Industry
Oil prices rose as much as a dollar on Thursday, extending gains this week and hitting 13-month highs, as a cold snap swept Texas and surrounding areas closed at least a fifth as a result of U.S. refurbishment and a million barrels of crude production.
PHOTO FILE: The sun can be seen behind a crude oil pump jacket in the Permian Lake in Loving County, Texas, USA, November 22, 2019. REUTERS / Angus Mordant / File Photo
TOKYO: Oil prices rose as much as a dollar on Thursday, extending gains this week and hitting 13-month highs, as a cold snap swept Texas and surrounding areas closed at least one-fifth of U.S. re-production and one million barrels of crude production.
Brent crude climbed 93 cents, or 1.5per percent, to US $ 65.27 a barrel by 0219 GMT, touching the highest level since January 20, 2020. U.S. West Texas Intermediate (WTI) crude futures gained 76 cents, at 1.2per cent, to the US. $ 61.90 a barrel, recording the highest level since January 8, 2020.
Both criteria rose to about US $ 1 on Wednesday and have gained more than 6per cents since they closed last Thursday. The abnormal frosts that hit many of the United States could hamper raw production for days or even weeks, analysts said.
Texas’ energy sector remained without power for a fifth day Wednesday, after an arctic explosion stretched deep into southern states that are not normally hit by extreme cold.
About 1 million barrels per day (bpd) of crude production was shut down, according to Wood Mackenzie analysts, and it could be weeks before production is renewed.
“A collection of new oil futures purchases was spurred as an unexpected impact on Texas oil and refinery production from a cold storm raising fears of crude and fuel supply,” said Chiyoki Chen, chief executive analysis at Sunward Trading.
“A larger-than-expected pull in U.S. crude oil investments also contributed to supply concerns,” Chen said.
U.S. crude oil stocks fell 5.8 million barrels per week to Feb. 12 to about 468 million barrels, compared to analysts ’expectations for a pull of 2.4 million barrels, American Petroleum Institute data showed.
U.S. Energy Information Administration (EIA) oil index data will be released later Thursday, postponed by day after holiday Monday.
Oil prices have risen in recent weeks on hopes of a boost to the U.S. and as global supply tensions tighten, largely as a result of production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and related producers in the UK. OPEC + group.
But OPEC + sources told Reuters that the group’s representatives are likely to make loops on supply after April as prices have recovered.
(Reporting by Yuka Obayashi; Editing by Tom Hogue)