Oil Prices Are Rising Due to Fears That US Crude Production Will be Affected by Cold in Texas

Oil prices rose again Thursday, February 18th, to reach their highest levels in 13 months, as markets witnessed new buying due to fears that the sudden cold weather in Texas could disrupt US crude production for days or perhaps weeks.

Brent crude rose 89 cents, or 1.4%, to $65.23 a barrel, touching its highest level since January 20, 2020. US West Texas Intermediate crude futures gained 66 cents, or 1.1%, to $ 61.80. Per barrel, its highest level since January 8, 2020.

The two benchmarks rose towards a dollar on Wednesday and have gained more than 6% since their close last Thursday.

Oil production and refining companies remained closed in Texas for the fifth day yesterday, Wednesday, after a severe cold that has continued for days, and the state governor issued an order banning natural gas exports in an attempt to speed up the pace of resuming electricity supplies.

Data from the American Petroleum Institute showed that US crude inventories fell by 5.8 million barrels in the week ending February 12, to about 468 million barrels, compared with analysts’ expectations of 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, which includes Russia.

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