Oil prices jumped around 4% Monday, supported by the expected slow return to US crude production after the extremely cold wave that struck Texas.
American producers shut down between 2 million to 4 million barrels per day of oil production due to the cold wave in Texas and other oil-producing states, which may have damaged facilities, which may keep production stalled for a longer period than expected.
According to Reuters, the global benchmark Brent crude futures ended the trading session up $ 2.33, or 3.7%, to settle at $ 65.24 a barrel, while the US benchmark West Texas Intermediate crude futures closed up $ 2.25, or 3.8%, to $ 61.49 a barrel.
US crude contracts for March delivery will expire on Monday. The most heavily traded April contracts rose $ 2.44, or 4.1%, to $ 61.70 a barrel.
OPEC + oil producers are due to meet on March 4 and sources say the group is likely to ease supply restrictions after April due to the recovery in prices, although any increase in production is likely to be modest given the continuing uncertainty. Surrounding the COVID-19 pandemic.
OPEC and US oil companies believe that the recovery of supplies from the shale oil industry will be limited this year, as major American producers are working to stabilize production despite the high prices, a decision that will benefit OPEC and its allies.
And this month, the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for tight US crude for 2021 and now expects production to drop by 140,000 barrels per day to 7.16 million barrels per day.
The US government expects a decrease in shale crude production in March by 78 thousand barrels per day, to reach 7.5 million barrels per day.
OPEC’s expectations were issued before the cold wave that swept the state of Texas, the source of 40% of US oil production, closed wells and reduced demand from refineries in the region.
OPEC sources say that not increasing supplies of shale oil may facilitate the task of OPEC and its allies in directing the market.