Oil prices edges higher as Texas cold snap cuts U.S. output

Chevron oil exploration drilling site near Midland, Texas, U.S. August 22, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices edged higher on Thursday as a cold snap sweeping Texas and surrounding regions shut at least a fifth of U.S. refining output and a million barrels of crude production.

Brent crude rose 79 cents, or 1.23%, to $65.13 a barrel by 0603 GMT, touching its highest since January 20, 2020.

U.S. West Texas Intermediate (WTI) crude futures gained 57 cents, or 0.93%, to $61.71 a barrel, registering its highest since January 8, 2020.

Both benchmarks rose about 1% on Wednesday and have gained more than 6% since their close last Thursday, according to Reuters.

Reuters cited Analysts as saying the unusual freeze hitting much of the United States could hamper crude output for days or even weeks.

The Texas energy sector remained without power for a fifth day on Wednesday, after an arctic blast stretched deep into southern states not typically hit by extreme cold.

Roughly 1 million barrels per day (bpd) of crude production have been shut, according to Wood Mackenzie analysts.

“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,” Reuters quoted Chiyoki Chen, chief analyst at Sunward Trading, as saying.

“A larger-than-anticipated draw in the U.S. crude oil inventories also added to supply concerns,” Chen said.

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