Oil costs rise as freezing closes US oil wells and restricts refineries by Reuters


© Reuters. FILE PHOTO: Pump jacks operate at sunset in a Midland oil field

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices rose Tuesday as a cold front shut down wells and refineries in Texas, the largest crude oil producing state in the United States and the largest oil producer in the world.

Prices also rose when Yemen’s Iranian-focused Houthi group said it had hit airports in Saudi Arabia with drones, raised supply concerns for the world’s largest oil exporter, and expressed optimism for a global economic recovery amid accelerated adoption of COVID-19 vaccines .

rose 11 cents, or 0.2%, to $ 63.41 a barrel at 0144 GMT after rising to its highest level since January 2020 in the previous session.

US West Texas Intermediate (WTI) crude oil futures rose 62 cents, or about 1%, to $ 60.09 a barrel. WTI did not settle on Monday due to a U.S. federal holiday. Prices are settled at the close of trading on Tuesday.

“The unexpected disruption in US supply provides another short-term bridge to price rebound, which has likely brought oil prices to levels where markets eventually moved, but only a little faster than expected,” said Stephen Innes, chief strategist for global Markets at Axi, in a note on Tuesday.

Cold weather in the US halted oil wells and refineries in Texas on Monday, forcing restrictions on crude oil pipeline operators.

The rare freezing caused the state’s electric utilities to impose rotating power outages, leaving nearly 3 million homes and businesses without power.

Texas produces around 4.6 million barrels of oil daily and is home to 31 refineries, most of all US states, including some of the largest in the country, according to the Energy Information Administration.

In the Middle East, Jeman’s Iranian-focused Houthi group said Monday it had hit Abha and Jeddah airports in Saudi Arabia with drones.

The Saudi Arabia-led coalition that fought against the Houthis in Yemen said early Monday morning it intercepted and destroyed an explosives-laden drone that had been fired at the kingdom by the Houthis.

The World Health Organization (WHO) listed AstraZeneca (NASDAQ 🙂 and Oxford University’s COVID-19 vaccine for emergencies on Monday to expand access to the relatively inexpensive shot in developing countries.

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