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Natural gas futures spurred energy prices across the board on Tuesday as large parts of the United States struggled with sub-zero temperatures and continual blackouts hitting several states .
HOH21 natural gas futures markets,
climbed 5.5% to $ 3.073 per million British thermal units, while March gasoline RBH21,
climbed 5.3% to $ 1.7813 per gallon. And the March heating oil RBH21,
was up nearly 3% to $ 1.8235 per gallon.
The price spike came when the Southwest Power Pool, a utility group spanning 14 states, ordered utilities to begin blackouts to deal with a depleted reserve of reserve power. It was then that a winter storm swept through the Ohio Valley to the Gulf Coast of the United States, bringing freezing temperatures as far south as San Antonio, Texas.
Extreme winter conditions forced Texas wind power producers to go offline and spike in electricity prices. The Texas Electric Reliability Council estimated two million people were without power as of Monday night, the Wall Street Journal reported. President Joe Biden declared a state of emergency in Texas at the behest of Governor Greg Abbott, paving the way for emergency aid to reach the state. The storm has so far killed two people in Texas.
The rare storm that hit Texas also raised concerns over oil supply disruptions amid reports of some refineries shutting down due to extreme cold.
The deep freeze also triggered a sharp rise in oil futures prices on Monday. Regular exchanges have been closed due to Presidents Day.
March CL.1 crude price,
climbed 61 cents, or 1% to $ 60.08 a barrel, after going above $ 60 a barrel for the first time since January 2020 on Monday. Brent BRN00 Price,
gained 27 cents to $ 63.47 a barrel, also marking a January 2020 high.
Read: Oil ends Friday session higher on Middle East tensions, with global prices up more than 5% for the week
“But because the surge in energy demand in Texas and a drop of up to one million barrels in daily supply are temporary, levels above $ 60 look attractive to top sellers,” warned Ipek Ozkardeskaya. , Senior Analyst at Swissquote, in a note to clients. . “A downward correction could easily kick in and push prices below $ 55 a barrel, but should not detract from the positive medium-term trend in oil prices.”
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