On Wednesday, both US and UK crude oil futures’ prices soared just a notch shy of 2 per cent as a freezing temperature in the US state of Texas, the largest crude oil producing state in the United States, alongside a widespread power outage had led to an abrupt downturn in production, eventually led to a torrential rise in crude oil contracts’ prices.
Aside from that, according to local media reports, weather forecasts had revealed that the southwestern part of US might experience a freezing temperature over the coming days, which in effect would hamper output for days, if not for weeks.
Notably, latest leg of blowout rallies in the crude oil futures’ prices that had lifted the precious black gold contracts to their highest level since January 2020, were primarily supported by a pledge from OPEC+ nations to curb outputs, while an additional 100,000 bpd (barrels per day) output cut of OPEC-kingpin Saudi coupled with a rebound in demands following a kickstart of a pandemic vaccination campaign in a majority of G7 economies including the US and UK, added to further silver lining on investors’ optimism.
Crude oil rises as freezing Texas temperature knocks pipelines, drilling rigs offline
Apart from a raft of pre-existing aspects which were fleeting crude oil futures’ prices with flying colours, a historically freezing temperature in the US state of Texas that accountable for a lion’s share of US crude output, had frozen oil pipelines while knocking drilling rigs offline, propelling crude oil futures’ prices even higher.
Citing statistics, in the day’s commodity market wind down, the UK crude added 1.6 per cent to settle down at $64.34 per barrel, while the US West Texas Intermediate (WTI) crude oil futures’ prices climbed 1.8 per cent to $61.14 a barrel.
Both benchmarks were anchoring at their highest level in more than thirteen months. Meanwhile, adding that the US crude oil output might meet with sheer hindrances for days, if not for weeks, a director of energy futures at Mizuho in New York, Bob Yawger said, “This has just sent us to the next level. Crude oil WTI will probably max out somewhere pretty close to $65.65. ”