Global crude oil prices have spiked as the US slowly increased crude output following frigid conditions that raised supply concerns just as demand surged from the depths of the Covid-19 pandemic.
Brent crude increased by $0.76, or 1.2%, to reach $61.67 a barrel following gaining nearly 1% last week while US oil climbed $0.74, or 1.3%, to reach $59.98 a barrel, reported Reuters.
As per analyst estimates, up to four million barrels per day (bpd) of crude production and 21 billion cubic feet of natural gas output was forced to close in the US following abnormal cold weather in Texas and the Plains states.
Analysts said it would take several days for oilfield crews to de-ice valves, restart systems and commence oil and gas output.
Damage assessment at the US Gulf Coast refiners and facilities is underway and would take up to three weeks to restore most of their operations, analysts noted.
ANZ Research was cited by the news agency as saying: “With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low.
“Longer term, the fall in capital expenditure at US shale oil companies this year will keep drilling activity subdued, leading to output remaining below pre-pandemic levels.”
Drilling companies in the US have cut the number of oil rigs operating, for the first time since November due to adverse weather in Texas, New Mexico and other oil-producing centres.