Oil prices surged to a 13-month high on Wednesday after deep cold cut production and reduced crude oil production last week, according to US data.
The Energy Information Administration said that during the rare winter storm in Texas, US crude oil production fell more than 10% last week, or 1 million barrels a day, equaling the largest weekly drop ever. Refinery crude oil inputs fell to the lowest level since September 2008.
If this kind of decline is happening in one week’s production, more will likely come back later. It is obvious that this cannot be a permanent long-term decrease in production.
Traffic on the Houston ship channel is slowly returning to normal. Refineries are also back online this week, after nearly a quarter of the national refining capacity was wasted by the cold.
Brent crude futures rose $1.67, or 2.6%, to settle at $67.04 a barrel. The global benchmark hit a session high of $67.30 a barrel, its loftiest since Jan. 8, 2020.
West Texas Intermediate (WTI) crude futures ended $1.55, or 2.5%, higher at $63.22 a barrel, after touching $63.37, also their highest since Jan. 8, 2020.
The uptrend continued steadily towards unpredicted levels according to renewed demand forecasts as vaccine distribution increased.
With the ongoing supply disruption discipline of the Organization of Petroleum Exporting Countries and its allies, oil prices have increased by about 30% since the beginning of the year.
Industry sources said that some investors entered into US oil options contracts worth $ 100 with a commodity appetite and took action against inflationary pressure.
Volumes in bullish call options and call option spreads for U.S. crude for delivery in December 2021 and December 2022 have surged over the past week, dealers said.
It is rumored that OPEC + oil producers will be discussing easing their oil supply constraints starting in April, although some OPEC + sources propose to remain stable for now, considering the risk of new disruptions in the fight against the pandemic.
