Oil roars back, snaps up two-day long losing streak as Texas storms hinder output

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Oil roars back, snaps up two-day long losing streak as Texas storms hinder output

On Monday, both US and UK crude oil futures’ prices had snapped a two-day long losing streak experienced later last week, as a historic Texas winter storm that wreaked havoc on the US state alongside southwestern part of the country led to a mass-scale meltdown in crude oil outputs in the United States’ largest oil producing state, spurring up possibilities of a slower-than-anticipated recovery.

Notably, Texas refiners alongside oil drilling rigs, which were forced to shutter down earlier last week amid a historic cold resulting in a freezing of oil pipelines, have been expected to resume operations by next Friday, though several industry analysts had raised an alarming bell saying that oil outputs in the region might take days to reach a pre-storm level, if not weeks.

In context of such bullish fundamentals in the crude oil futures market, both US WTI (West Texas Intermediate) and UK crude gained more than 3 per cent in the day.

Oil futures feather as shale producers may take up to 2 weeks to restore output

On top of that, according to US energy industry analysts, oil producers in the United States had curbed out between 2 million to 4 million barrels per day of output because of bad weather in Texas and other oil producing states last week, roughly 2 to 4 per cent of entire global crude oil production, while adding further bullish wind to investors’ optimism, major shale oil producers in the region were quoted saying that they might take at least two weeks to restore normal output.

Citing statistics, in the day’s commodity market round off, Brent crude surged 3.2 per cent to $64.95 a barrel, while US WTI (West Texas Intermediate) crude oil futures’ prices gained as much as 3.4 per cent to $61.25 a barrel.

Meanwhile, citing prospects of further upswing momentum in crude oil futures’ prices over the coming days, Jim Ritterbusch of consultancy firm Ritterbusch and Associates said in a client note, “The significant loss of both crude and gasoline production suggests more upside and likelihood of new highs possibly within a one-week time frame.