In trading on Monday (22nd), crude oil futures prices closed at a high of more than a year, because traders expected a slow recovery in production after the winter storm that previously caused production interruptions and refineries closed.
IHS Markit energy market analyst Marshall Steeves said, “Traders are concerned about the speed of Texas’ recovery this week.”
“It is not clear how much oil and gas production was lost in total last week.” Some reports estimate that US crude oil production has lost as much as 40%.
“At first, the closed production work may be resumed within a few days, but because the oil pipeline may freeze and the oil infrastructure must be checked before restarting production, the shutdown period may take longer than expected.” Steeves Say.
- WTI crude oil futures prices for March delivery rose 2.25 USDOr 3.8%, 61.49 per barrel USD. The contract expires today.
- WTI crude oil futures for delivery in April rose 2.44 USDOr 4.1%, 61.70 per barrel USD。
- The price of Brent crude oil futures for delivery in April rose 2.33 USDOr nearly 3.7%, 65.24 per barrel USD。
- Brent crude oil futures prices for delivery in May rose 2.22 USDOr nearly 3.6%, 64.36 per barrel USD。
According to Dow Jones market data, the WTI and Brent crude oil futures contracted in the last month both closed at their highest closing prices since January last year.
A report released by the Goldman Sachs Commodity Team on Sunday also boosted prices. The report expects Brent crude oil prices to reach 75 per barrel before the third quarter USD, Which is 10% higher than the previous estimate USD, The reason is the expected decline in inventory and the rise in the marginal cost of restarting upstream activities.
Crude oil futures prices surged to a high in more than a year last Wednesday, because the winter storm hit crude oil production and also shut down a large number of refineries in Texas. Oil gave up these gains before the end of last week because the market expected production to recover soon.
“Oil prices may fluctuate because various signs of supply and demand changes put pressure on market sentiment, but in the near term, there may be more upside this week due to supply disruptions in Texas,” Steeves said.
However, if production returns quickly this week, it may reverse Monday’s gains. In addition, OPEC+’s meeting on March 4, if it decides to increase production from April, may also reverse the upward trend in oil prices.
“Although Saudi Arabia has indicated that it will reduce some of its production reduction plans, the market is still waiting to see what OPEC+ will make.” Steeves said.
Other energy commodities
- Gasoline futures prices for March delivery rose 1.9% to close at 1.8417 per gallon USD, Which is the highest closing price of the contract of the most recent month since July 2019.
- Hot fuel oil futures for March delivery rose 2% to close at 1.8586 per gallon USD。
- Natural gas futures prices for March delivery fell by 3.8%, closing at 2.953 per million Btu USD, Rose more than 5% last week. The contract expires at the close on Wednesday.
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