Oil gains more than 1% as Texas weather prompts U.S. production drop
Oil rose on Wednesday, buoyed by frigid Texas temperatures that curtailed production in the largest U.S. producing state, offset somewhat by reports that Saudi Arabia plans to increase output in the coming months.
Benchmark Brent crude gained 99 cents, or 1.56%, to settle at $64.34 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.09, or 1.82%, to settle at $61.14 per barrel.
Oil has been supported by OPEC+ supply curbs, Saudi Arabia’s additional cuts and hopes of a demand rebound due to COVID-19 vaccinations. Historic cold weather in Texas, which supplies the bulk of U.S. crude, has propelled prices higher in recent days.
The U.S. deep freeze should disrupt production for several days if not weeks, industry experts said, as wellheads have frozen and refineries have been shut.
Brent and WTI rose more than $1 during the session, hitting their highest level since January 2020. Prices pared gains after the Wall Street Journal reported that Saudi Arabia was expected to announce plans to raise output when OPEC and allied oil producers meet next month.
But Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.
Oil drillers, refiners struggle with Texas deep freeze
The Texas energy sector was in the dark for a fifth day on Wednesday, as oil producers remained without power, several ports closed, and at least a fifth of U.S. refining output was offline due to an arctic blast hitting most of the United States.
Reference: CNBC, Reuters
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