Oil prices steadied on Thursday, with Brent edging back from a 13-month high, after a sharp drop in U.S. crude inventories supported prices, while buying spurred by a cold snap in the largest U.S. energy-producing state petered out, as reported by Reuters.
Brent crude rose 3 cents to $64.37 a barrel by 11:40 a.m. EST (1640 GMT), after increasing to $65.52 earlier in the session, its highest since Jan. 20, 2020.
U.S. West Texas Intermediate (WTI) crude futures rose 5 cents to $61.19 a barrel, after earlier reaching $62.26, the highest since Jan. 8, 2020.
U.S. crude stockpiles fell by 7.3 million barrels in the week to Feb. 12, the Energy Information Administration said on Thursday, compared with analysts’ expectations for an decrease of 2.4 million barrels.Crude exports rose to 3.9 million barrels per day, the highest since March, EIA said.
“The big nugget was the big jump in exports of crude oil,” said John Kilduff, partner at Again Capital in New York. “We’ll have to see what happens with that next week weather in Texas, but I have been looking for a pick up there for a while.”
Texas’ freeze entered a sixth day on Thursday, as the largest energy-producing state in the United States grappled with refining outages and oil and gas shut-ins that rippled beyond its borders into neighbouring Mexico.
The deep freeze has shut in about one-fifth of the nation’s refining capacity and closed oil and natural gas production across the state.
“The temporary outage will help to accelerate U.S. oil inventories down towards the five-year average quicker than expected,” SEB chief commodities analyst Bjarne Schieldrop said.
Oil’s rally in recent months has also been supported by a tightening of global supplies, due largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the OPEC+ grouping, which includes Russia.
OPEC+ sources told Reuters the group’s producers are likely to ease curbs on supply after April given the recovery in prices.
Additional reporting by Yuka Obayashi in Tokyo; editing by Emelia Sithole-Matarise and Steve Orlofsky
