Crude oil futures ended sharply higher on Wednesday amid rising concerns over likely disruptions in supply due to severe cold weather in Texas.
Due to extremely cold temperatures in Texas, fuel flow to power plants has been affected, resulting in a huge surge in demand for energy.
According to ANZ and Citigroup analysts, at least 2 million barrels per day (bpd) of U.S. shale oil production has been curtailed.
Chevron Corp said that it shut it’s 112,229 barrel-per-day (bpd) Houston-area refinery in Pasadena, Texas, on Tuesday.
West Texas Intermediate Crude oil futures for March ended up $1.09 or about 1.8% at $61.14 a barrel after surging to a high of $61.28, the highest mark since January 2020.
Meanwhile, traders are looking ahead to weekly crude inventory reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA).
The report from API is due out later today, while EIA’s inventory data is due out Thursday morning. The delay in release of data from the two agencies by a day is due to a holiday in the U.S. on Monday for President’s Day.
The Organization of the Petroleum Exporting Countries and its allies are set to meet early March to set their policy. It is expected that the producers will likely ease curbs on supply after April given a recovery in prices.