Oil Prices Rise as Production Begins Slowly in The United States

Oil prices increased due to the slow resumption of US crude production after it was reduced by freezing weather conditions while demand recovered from its low levels during the Corona pandemic.

Brent crude rose 55 cents, or 0.9%, to $63.46 a barrel, after increasing nearly 1% last week. U.S. crude rose 47 cents, or 0.8%, to $59.71 a barrel, after falling 0.4% last week.

Prices also received a boost after investment bank Goldman Sachs raised its forecast for Brent crude by ten dollars, with expectations that it would reach $70 in Q2 and 75 in Q3.

Analysts estimate that unusually cold weather in Texas and the plains states have halted production of up to four million barrels of crude as well as 21 billion cubic feet of natural gas.

It will likely take several days for oil rights crews to clear the snow off the valves, restart systems and start producing oil and gas.

Analysts said that refiners in the US Gulf Coast are assessing the damage, and it may take them three weeks to resume most of their operations, but the low water pressure and the interruption of gas and electricity supplies hamper their work.

For the first time since November, US energy companies reduced the number of operating oil drilling rigs due to the cold weather and snow that envelop Texas, New Mexico and other oil-producing centres.