Tuesday, November 28, 2023

Oil prices rose with deep freeze closing oil wells in the U.S. and restricting refineries

SINGAPORE: Oil prices rose on Tuesday, due to cold front closing wells and refineries in Texas, the largest oil-producing state in the United States, the largest oil producer in the world.

Prices also rose while the Houthi group, aligned with Iran, Yemen, said it attacked airports in Saudi Arabia with drones, raising concerns about the supply of the world’s largest oil exporter, and optimism for a global economic recovery through the accelerated launch of the COVID-19 vaccine.

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

Moreover, U.S. West Texas Intermediate (WTI) crude futures gained 62 cents, or about 1%, to $ 60.09 a barrel. The WTI was not closed on Monday because of a US federal holiday. But they will adjust prices at the close of trading on Tuesday.

However, The unexpected supply disruption in the United States offers another bridge of short-term price recovery that probably brought oil prices to a level where markets were eventually going, but a little faster than expected,” said Stephen Innes, Axi’s chief global markets strategist in a note on Tuesday.

Furthermore, Cold weather in the U.S. disturbed Texas oil wells and refineries on Monday and forced restrictions on natural gas and gas pipeline operators.

The rare deep freeze has led state electricity providers to impose rotating blackouts, leaving nearly 3 million households and businesses without power.

However, Texas produces about 4.6 million barrels of oil every day and is home to 31 refineries, the largest in any state, including some of the largest in the country, according to the Energy Information Administration.

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