Oil prices rose on Wednesday as concerns over supply disruptions persisted due to a winter storm that disrupted crude production and exports in the United States, while tensions in the Middle East provided additional support.
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Brent crude futures climbed 28 cents, or 0.4%, to $67.85 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 35 cents, or 0.6%, to $62.74 per barrel.
Both benchmark crudes gained around 3% on Tuesday.
Analysts’ and traders’ estimates indicated that U.S. production fell by up to 2 million barrels per day, or about 15%, at the start of the week due to the winter storm that swept across the country, putting pressure on energy infrastructure and power grids.
Ship-tracking service Vortexa reported that U.S. crude oil and liquefied natural gas exports from Gulf Coast ports dropped to zero on Sunday.
Toshitaka Tazawa, an analyst at Fujitomi Securities, said that production outages in Kazakhstan are also supporting prices.
He added, “Once supply concerns ease, selling pressure will likely return.”
Tazawa noted that the balance between the expected supply surplus this year and geopolitical risks, including tensions in the Middle East, could keep U.S. crude trading around $60 per barrel for the time being.
Two sources familiar with the matter told Reuters that Kazakhstan’s Tengiz oil field, the country’s largest, is likely to restore less than half of its normal output by February 7 as it slowly recovers from a fire and a power outage.
Meanwhile, CPC, which operates the pipeline handling about 80% of Kazakhstan’s oil exports, said it had returned to full loading capacity at its Black Sea terminal after maintenance was completed at one of its three mooring points.
Supply Concerns Persist Amid Middle East Tensions
U.S. President Donald Trump said on Tuesday that another “war fleet” is heading toward Iran, adding that he hopes Tehran will reach an agreement with Washington.
Two U.S. officials told Reuters on Monday, speaking on condition of anonymity, that a U.S. aircraft carrier and supporting warships have arrived in the Middle East, strengthening Trump’s ability to defend U.S. forces or potentially carry out military action against Iran.
Analysts at ANZ said in a note that this has increased the likelihood of Trump following through on his threat to strike Iran’s top leadership in response to the violent crackdown on protests in the country.
On the supply side, three OPEC+ delegates said the alliance—which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies—is expected to maintain its pause on increasing oil production in March during a meeting scheduled for February 1.
A wide Reuters poll on Tuesday indicated that U.S. crude oil and gasoline inventories likely rose in the week ended January 23, while distillate inventories fell.
However, market sources cited figures from the American Petroleum Institute on Tuesday showing that U.S. crude oil and gasoline inventories declined last week, while distillate inventories increased. (Reuters)
