Oil prices fell for the second day on Friday and fell from recent highs as Texas energy companies began preparations to reopen oil and gas fields closed due to freezing weather and power outages.
Brent crude futures ended the session down $1.02, or 1.6%, at $62.91 a barrel while West Texas Intermediate (WTI) crude fell $1.28, or 2.1%, to settle at $59.24.
For the week, Brent gained about 0.5% while WTI fell about 0.7%.
This week, both benchmarks had climbed to the highest in more than a year.
Analysts estimate that unusually cold weather in the states of Texas and Plains reduced 4 million barrels of crude oil per day (bpd) production and 21 billion cubic feet of natural gas.
US energy firms reduced the number of oil rigs operating for the first time since November this week.
Texas refineries stopped nearly a fifth of oil processing in the country due to power outages and severe cold.
Sources said companies are expected to prepare to resume production from Friday, as electrical power and water services are slowly resuming.
Given too much uncertainty regarding the magnitude of the loss of supply this week, the size and possible duration of lost production, further price cuts may be required.
Oil prices fell despite the surprise drop last week before the massive freeze in US crude oil stocks. Stocks fell 7.3 million barrels to 461.8 million barrels, the lowest since March, the Energy Information Administration reported on Thursday.
The vaccines and their impressive distribution, OPEC + especially Saudi Arabia’s efforts to limit production, and the massive freeze in Texas have made strong gains. However, oil prices took a small hit in the last days of this week. While there are many oil price bullish factors, we see that some positions are not resolved.
Analysts did not expect the sanctions imposed on Iran by the previous US administration to be lifted in the short term. The US said on Thursday that it is ready to negotiate with Iran on returning to the 2015 agreement aimed at preventing Tehran from acquiring nuclear weapons. This progress increases the likelihood that Iran will soon return to the oil market.