Brent Gave up Gains After Surging Above $65 Due to a Cold Snap in Texas

Oil prices erased gains made in early trading after Brent hit a new high in 13 months, surpassing $65 a barrel, as markets witnessed new buying due to fears that sudden cold weather in Texas could disrupt US crude production for days or perhaps weeks.

Brent crude fell 3 cents, recording $64.31 a barrel, after it had reached $65.52 earlier in the session, its highest level since January 20, 2020.

US West Texas Intermediate crude futures fell four cents to $61.10 a barrel, after previously reaching $62.26 a barrel, their highest since January 8, 2020.

The cold wave continued in Texas for the sixth day today, Thursday, as the largest US state of energy production suffers from a major disruption in refining activities and shutdowns of oil and gas production operations, whose effects reached neighbouring Mexico.

This caused about four million barrels per day of refining capacity to stop and about one million barrels per day of oil production.

Data from the American Petroleum Institute showed that US crude inventories fell 5.8 million barrels in the week ending February 12, to about 468 million barrels, compared with analysts’ expectations for a decrease of 2.4 million barrels.

Oil stocks data from the US Energy Information Administration is due to be published later on Thursday, a day late after Monday’s holiday.

The rise in the price of oil in recent months has also been supported by the scarcity of global supplies, largely due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the OPEC+ group that includes Russia.

OPEC+ sources told Reuters that the group’s producers would likely ease restrictions on supplies after April, given the recovery in prices.