Oil (CL) prices sparked above $60 a barrel on Monday, for the first time since the early days of 2020 as regions across the U.S. have recently been hit by freezing weather. Arctic conditions boosted demand for electricity and fuel, while threatening Gas and Oil production in Texas.
The arctic weather caused major refineries to shut down on Monday due to electricity, fuel and water cuts across Texas. Over three million barrels of daily Oil processing has been delayed because of storms.
These shutdowns threaten supply restrictions on other various commodities such as gasoline, propane and various Oils, which may continue for weeks. This demand for supply impacts cities across America which especially rely on the U.S. Gulf Coast for gasoline. Production setbacks will likely go beyond Texas if the cuts turn from days into weeks, taking into account that the Oil sector has already reduced production during the COVID-19 outbreak.
Arctic Conditions Rally Oil and Gas Prices
Some Oils felt the cold and rose yesterday, hitting above $60 a barrel. These included Oil (CL) 0.7% with a high of 60.96, Brent Oil (EB) reached a 13 month high of 63.78 a barrel and WTI crude futures climbed just over $60.00.
As Oil production was idled by the cold, Natural Gas (NG) welcomed the storm, following Oil’s price upward trend and jumped 3.8% at the end of the trading day yesterday.
As traders keep their mittens on and watch for further developments in Texas, it is still unknown how these commodities will react in the coming days and if the storm will continue to affect supply for days or weeks.