Oil prices advanced further on Wednesday, underpinned by major supply disruption in the south of the United States this week, caused by a historic winter storm in Texas.
U.S. West Texas Intermediate (WTI) crude futures rose 41 cents, or 0.68%, to $60.46 a barrel at 0752 GMT.
Brent crude futures gained 44 cents, or 0.69%, to $63.79 a barrel.
Oil prices have run up strongly in recent months and output disruptions caused by the storm in Texas, the country’s largest oil producing state, continued to keep prices supported, analysts said.
ANZ and Citigroup analysts estimated at least 2 million barrels per day (bpd) of U.S. shale oil production has been curtailed. Citi estimated a cumulative production loss of around 16 million barrels through early March.
But the extreme cold has also hit crude demand due to disruptions to refinery operations. Chevron Corp’s 112,229 barrel-per-day (bpd) Houston-area refinery in Pasadena, Texas, was shut on Tuesday, the company said.
The stronger price environment has put more attention on OPEC+, who will meet to set policy on March 4, analysts said.
“The impact on crude oil prices will largely depend on how long the power crisis will last, but eventually prices will likely return to the fundamentals with a focus on the global energy demand and OPEC+,” said Margaret Yang, a strategist at Singapore-based DailyFX.
OPEC+ oil producers are likely to ease curbs on supply after April given a recovery in prices, OPEC+ sources told Reuters.
Saudi Arabia’s voluntary cut of 1 million barrels per day (bpd) ends next month. While Riyadh hasn’t shared its plans beyond March with its OPEC+ partners, expectations in the group are growing that Saudi Arabia will bring back the supply from April, perhaps gradually.
U.S. oil inventory data from the American Petroleum Institute industry group and the Energy Information Administration (EIA) will be released on Wednesday and Thursday respectively, delayed by a U.S. holiday on Monday.
Analysts polled by Reuters estimated, on average, that crude stocks fell 2.2 million barrels in the week to Feb. 12.
Reporting by Sonali Paul and Shu Zhang; Editing by Richard Pullin and Ana Nicolaci da Costa