Oil prices surged again on Thursday, reaching a 13-month high as concerns that the rare seen cold weather in Texas could cut US crude oil production for days or even weeks triggered new purchases.
Brent crude was up 56 cents, or 0.9%, at $64.90 a barrel at 0744 GMT, after rising to $65.62 earlier in the session, its highest since Jan. 20, 2020.
West Texas Intermediate (WTI) crude futures gained 46 cents, or 0.8%, to $61.60 a barrel, after earlier rising to $62.26, the highest since Jan. 8, 2020.
Both benchmarks rose about $1 on Wednesday and have gained about 6% since their close last Thursday.
Texas, the largest energy-producing state in the US, hit day six on Thursday, struggling with fluctuating oil and gas cuts beyond its borders towards neighboring Mexico.
About 1 million barrels of crude oil production a day has been halted, and it may take weeks to fully restore, according to analysts.
Oil prices are expected to remain in an upward trend, with the hope of the U.S.’s new economic package and wider spread of the COVID-19 vaccine. WTI is likely to test the key $ 65 level. In addition, the larger-than-expected decline in US crude oil stocks raises supply concerns.
U.S. crude oil stocks fell 5.8 million barrels over the week to about 468 million barrels, compared to analysts’ expectations of a 2.4 million barrel draw, according to data from the American Petroleum Institute.
The rally for oil in recent months has also been bolstered by tightening global supplies, largely due to production cuts from the Organization of Petroleum Exporting Countries (OPEC) and allied producers, including Russia.
Based on all this, supply constraints are likely to ease after April.