WTI Crude Oil & Natural Gas Rise amid Supply Disruptions

West Texas Intermediate crude oil, the North American benchmark, and natural gas rallied today amid supply disruptions. Brent crude, the global benchmark, has been trading about flat.

The main news piece affecting the energy markets was extreme cold in Texas, the biggest US oil-producing region, that resulted in supply disruptions. Texas produces about 4.6 million barrels per day, and the shutdown of the region’s refineries puts a big dent in US supply. Meanwhile, extremely low temperatures caused natural gas to freeze in pipes, resulting in blackouts and record-high electricity rates. That can explain why prices for natural gas soared during Tuesday’s session.

Another piece of news supporting crude oil was an ongoing strike at Norway’s largest oil loading terminal. Norway is the biggest oil producer in western Europe, responsible for 2.1 million barrels per day of oil production and 2 million barrels of oil equivalent per day of gas production. The strike can disrupt about a third of oil output and more than 40% of gas output.

Yesterday’s attack of the Iran-aligned Houthi group on Saudi Arabia’s airports with drones also boosted oil prices.

On top of that, crude oil continued to get support from the positive general market sentiment. Investors felt optimistic due to hopes that COVID-19 vaccine rollouts and fiscal stimulus in major economies, particularly in the United States, will fuel global economic recovery. And the improving health of the world’s economy should result in higher demand for energy and fuel, bolstering prices for oil and gas.

Futures for delivery of WTI crude oil in March rose by $0.39 (0.66%) to $59.86 per barrel as of 9:26 GMT on NYMEX today. Brent crude for delivery in April was trading near the opening level for a while bat slipped by $0.08 (0.13%) to $63.22 per barrel on ICE at the time of writing. March natural gas soared by $0.17 (5.77%) to $3.08 per million British thermal units on NYMEX.

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