Oil prices extend gains as Texas cold snap cuts U.S. output

TOKYO (Reuters) – Oil prices rose as much as a dollar on Thursday, extending this week’s gains and hitting 13-month highs, as a cold snap sweeping through Texas and surrounding areas closed at least one-fifth of US refining production and one million barrels of crude production.

Brent crude rose 93 cents, or 1.5%, to $ 65.27 a barrel at 02:19 GMT, hitting its highest level since January 20, 2020. US West Texas Intermediate crude futures contracts (WTI) gained 76 cents, or 1.2%, to $ 61.90 a barrel, posting their highest since January 8, 2020.

Both benchmarks rose about $ 1 on Wednesday and have gained more than 6% since their close last Thursday. The unusual freeze hitting much of the United States could hamper crude production for days or even weeks, analysts say.

Texas’ power sector went without power for a fifth day on Wednesday after an arctic explosion that spread deeply into southern states that are generally not affected by extreme cold.

According to analysts at Wood Mackenzie, around 1 million barrels per day (b / d) of crude production has been shut down, and it could be weeks before production is fully restored.

“A wave of new purchases of oil futures has been sparked as an unexpected impact on oil production and refiners in Texas from a cold storm raised fears of crude and fuel supplies,” he said. said Chiyoki Chen, chief analyst at Sunward Trading.

“A larger than expected draw from crude oil inventories in the United States has also added to supply concerns,” Chen said.

U.S. crude oil inventories fell 5.8 million barrels in the week of Feb. 12 to around 468 million barrels, compared to analysts’ expectations for a draft of 2.4 million barrels, data shows from the American Petroleum Institute. [API/S]

U.S. Energy Information Administration (EIA) oil inventory data will be released later Thursday, delayed by one day after a Monday public holiday. [EIA/S]

Oil prices have rebounded in recent weeks in hopes of a US stimulus and as global supplies tighten, in large part due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers of the OPEC + group.

But OPEC + sources told Reuters the group’s producers would likely ease supply brakes after April given the price recovery.