Oil futures surge 3% a barrel as winter storm slams US output
SEATTLE (Oil Monster): Oil prices settled 3% higher on Tuesday as producers reeled from a winter storm that hobbled crude production and drove U.S. Gulf Coast crude exports to zero over the weekend.
Brent crude futures settled up $1.98 or 3.02%, at $67.57 a barrel. U.S. West Texas Intermediate crude settled up $1.76 or 2.9%, at $62.39 a barrel.
U.S. oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated, as a severe winter storm swept across the country, straining energy infrastructure and power grids.
Severe weather has boosted crude futures, with short-term risks tilted to the upside on fears of supply disruptions, said Fawad Razaqzada, market analyst at City Index.
"The cold weather in the U.S. will likely cause quite significant drawdowns in oil stocks over the next few weeks, particularly if this weather persists," said Tamas Varga, an oil analyst at brokerage PVM.
Exports of crude oil and liquefied natural gas from U.S. Gulf Coast ports tumbled to zero on Sunday amid frigid weather, ship tracking service Vortexa said.
Exports rebounded on Monday with flows coming in above seasonal norms as ports reopened, said Samantha Santa Maria-Hartke, head of market analysis at Vortexa.
Kazakhstan's biggest oilfield, Tengiz is likely to restore less than half of its normal production by February 7 as it slowly recovers from a fire and power outage, two sources familiar with the matter told Reuters.
"The recovery of Tengiz production seems to be happening slower than earlier expected, keeping the oil market tighter," said Giovanni Staunovo, an analyst at UBS, adding that the weaker U.S. dollar was lending some support.
However, the CPC, which operates Kazakhstan's main exporting pipeline, said it returned to full loading capacity at its terminal on the Russian Black Sea coast after maintenance was completed at one of its three mooring points.
Courtesy: www.reuters.com