Oil prices approached 13-month highs on Tuesday and were bolstered by cold weather shutting down Texas wells and oil refineries in the south of the USA.
To combat the coronavirus pandemic, prices are rising as the introduction of vaccines and the main oil-producing countries are restricting supply. Both are good combined boosting higher prices.
West Texas Intermediate (WTI) crude futures settled up 1% to $60.05, after touching their highest since early January 2020. Brent settled up 5 cents, or 0.1%, to $63.35 a barrel, near the 13-month peak reached the previous session.
Cold weather, freezing of many wells and shutdowns of a few refineries supported the supply. Some facilities have experienced forced shutdowns due to power constraints. He estimates that 500,000 to 1.2 million barrels of crude oil production in the United States will be halted due to the cold. About 3 million barrels of refining per day could not be carried out in some of the major refineries in the USA.
Supply concerns in the Middle East were heightened Monday after the Houthis announced the destruction of an explosive-laden drone fired at the kingdom of Saudi Arabia, the world’s largest oil exporter.
Supply is expected to increase this spring, as OPEC + said oil producers will ease their production restrictions after April due to the recovery in prices. Still, manufacturers are cautious about the epidemic.