SULAIMANI (ESTA) — Oil prices rose on Monday as the slow return of U.S. crude output that was cut by frigid conditions raised concerns about supply just as demand is coming back from the depths of the coronavirus pandemic.
Brent crude was up 99 cents at $63.90 a barrel by 0607 GMT, while U.S. West Texas Intermediate (WTI) rose 81 cents to $60.05 a barrel.
Analysts estimated that abnormally cold weather in Texas and the Plains states forces the shut down of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, according to Reuters.
Oilfield crews will likely take several days to de-ice valves, restart systems and begin oil and gas output, Reuters reported.
U.S. Gulf Coast refiners are assessing damage to facilities and may take up to three weeks to restore most of their operations, Reuters cited analysts as saying.
“With three quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note, according to Reuters.
“Longer term, the fall in capital expenditure at U.S. shale oil companies this year will keep drilling activity subdued, leading to output remaining below pre-pandemic levels,” ANZ said.
