Oil was up Thursday morning in Asia, continuing an almost week-long rally and passing 13-month highs. The cold snap in Texas and surrounding regions continues to hamper production, with at least a fifth of U.S. refining output and a million barrels of crude production shut down.
Brent oil futures jumped 1.20% to $65.11 by 10:54 PM ET (3:54 AM GMT), the highest since Jan. 20, 2020. WTI futures rose 0.92% to $61.70, its highest level since Jan. 8, 2020. Both Brent and WTI futures remained firmly above the $60 mark, gaining more than 6% since Thursday.
The unusual weather could see production hampered for days or even weeks, some investors warned. The Texas energy sector saw its fifth day without power on Wednesday, after an unusual artic blast swept through the southern states. Wood Mackenzie analysts predicted that around a million barrels per day of crude production has been shut and warned that restoring production levels could take weeks.
“A flurry of fresh buying in oil futures was triggered as an unexpected impact on oil production and refiners in Texas from a cold storm raised supply fears of crude and fuel,” Sunward Trading chief analyst Chiyoki Chen told Reuters.
“A larger-than-anticipated draw in the U.S. crude oil inventories also added to supply concerns,” Chen added. U.S. crude oil supply data from the American Petroleum Institute showed a draw of 5.8 million barrels for the week ending Feb. 12, compared to the 2.175-million-barrel draw in forecasts prepared by Investing.com and the 3.5-million-barrel draw recorded during the previous week.
Data from the U.S. Energy Information Administration is due later in the day.
Also giving oil prices a boost recently were hopes for a U.S. stimulus package, in turn raising hopes for increased fuel demand, and a tightening of global supplies led by the Organization of the Petroleum Exporting Countries and allies (OPEC+). However, the recovery in prices could reportedly see the cartel ease supply curbs after April.