Crude oil prices spiked over concerns that cold weather in Texas, US, could disrupt production for another week or more, prompting investors to buy energy futures.
Brent crude gained $0.93 or 1.5% to reach $65.27 a barrel, representing its highest since 20 January 2020, while the US West Texas Intermediate (WTI) crude futures increased $0.76 or 1.2% to reach $61.90 a barrel, Reuters reported.
The arctic blast has affected the energy sector in Texas, curbing power for a fifth day on 17 February.
According to Wood Mackenzie analysts, the cold weather has led to the closure of nearly 1Mbpd of crude production and is expected to take weeks to restore full production.
Sunward Trading chief analyst Chiyoki Chen said: “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.
“A larger-than-anticipated draw in the US crude oil inventories also added to supply concerns.”
In the recent week, oil prices have been supported on hopes for US stimulus and oil supplies cut mostly from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the group OPEC+.
However, OPEC+ sources were reported by Reuters as saying that the group’s producers are considering easing oil supply curbs after this April, subject to oil prices recovery.