Frozen temperatures in areas of the United States have given a new impetus to the energy market rally, putting West Texas Intermediate crude at over $ 60 a barrel for the first time since the beginning of the Covid-19 pandemic.
WTI crude futures gained 1.8% to $ 60.53 a barrel Monday morning, extending its 2021 advance to 25%. Brent crude, the international benchmark, rose 1.2% to a 13-month high of $ 63.20 a barrel in London. Natural gas futures at Henry Hub in Louisiana rose 3.3% to $ 3.01 per million British thermal units.
The fresh power of the energy market recovery after the coronavirus shock came as an explosion of cold weather increased energy and fuel demand, while threatening to produce oil production in Texas. More than 150 million Americans are undergoing some kind of winter counseling, the National Meteorological Service said on Monday. The agency forecasts heavy snow and significant ice from the southern plains and the Ohio Valley to the northeast.
Some analysts believe that investors have pushed oil prices above justified levels of supply and demand, but others expect them to remain dynamic.
“We haven’t seen any surprising factors stop this type of rally, at least not yet,” said Carole Nakhle, chief executive of consulting firm Crystol Energy. Demand is preparing, crude oil stocks that rose last year are shrinking and the Organization of the Petroleum Exporting Countries is holding millions of barrels a day back from the market, she added.