Oil jumps $1/bbl as Texas freeze prompts U.S. output drop | Reuters

Oil jumps $1/bbl as Texas freeze prompts U.S. output drop | Reuters

Oil prices gained more than $1 a barrel on Wednesday, as frigid Texas temperatures shut production across the largest U.S. crude producing state, with the unusually cold weather expected to hamper output for days or even weeks.

Brent crude settled at $64.34 a barrel, gaining 99 cents, or 1.6%, while U.S. West Texas Intermediate (WTI) crude settled at $61.14 a barrel, rising $1.09, or 1.8%. Both benchmarks were at their highest levels since January last year.

Oil has been supported by OPEC+ supply curbs, Saudi Arabia’s additional cuts and hopes of a demand rebound due to COVID-19 vaccinations.

Historic cold weather since the weekend in Texas, which supplies the bulk of U.S. crude and is part of the main U.S. refining hub, has propelled prices even higher.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65,” Yawger said.