The price of oil soared to nearly US$60 per barrel — the highest level in nearly a year, as a severe winter storm not only increased the demand for energy, but also disrupted crude oil production at a number of oil refineries in Texas.
The rare blast of arctic temperatures across a number of southern regions in the US has created rolling blackouts, leaving millions of Americans without power. The severe winter weather has also shut down numerous oil wells, prompting operations at refineries to cease production in the region. In addition, a significant portion of pipeline capacity in Texas is overground and unable to withstand freezing temperatures, causing a further disruption in energy delivery.
The weather-related oil disruptions across the southern US also coincide with diminishing nationwide crude stockpiles, as OPEC continues to withhold millions of barrels per day from the market. For the week ending February 12, fuel demand in the US soared to 20.2 million barrels per day — the highest weekly level since demand dropped in March 2020. The combination of poor weather, refinery shutdowns, and diminishing oil supplies will likely lead to even higher prices in the US for a number of commodity products, including gasoline and propane.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.