On the 15th (local time), the roads are freezing due to the cold wave that struck Texas, USA, and cars are not speeding up. [사진=AFP·연합뉴스]
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International oil prices were shaken by the cold wave that hit the central and southern parts of the United States. It has exceeded $60 per barrel in over a year.
According to Bloomberg News on the 15th (hereafter local time), the price of Western Texas crude oil (WTI) for March delivery of the New York Commercial Exchange (NYMEX) ended at $60.12, up $0.65 (1.09%) per barrel compared to the previous trading day.
It is the first time since the new coronavirus infection (Corona 19) pandemic (a global pandemic) in January last year that the WTI price has exceeded $60 per barrel. WTI rose 25% this year. Brent crude for April delivery on the London ICE Futures Exchange is trading at $63.30, a jump of $0.87 (1.39%) per barrel.
International oil prices have been on the rise thanks to recent production cuts by major oil producing countries and expectations of economic recovery following the massive economic stimulus plan of the US government by Joe Biden.
Major foreign media such as Bloomberg News agree that the rise in oil prices on this day is due to the cold wave that hit the US.
This is because the demand for electricity and fuel in the United States is increasing due to a cold wave amid a situation where the supply of crude oil has contracted due to production cuts in major oil producing countries and a disruption in crude oil production in Texas.
Bloomberg News said that the cold wave that hit the United States is raising the possibility of a power outage in Texas, and that restrictions on the operation of oil fields and refineries in Texas are raising oil prices.
Energy SPEC’s adviser told Bloomberg News, “The largest oil refinery in North America was closed on the 15th as Texas cut electricity, water and fuel supply due to a cold wave.” This has stopped,” he said.
Saudi Aramco said the Motiva refinery in Port Arthur, Texas, was closed due to a cold wave. The Motiva refinery is the largest single refinery in the United States with an average daily production of 600,000 barrels.
As of the 15th (local time), the price change of Western Texas Mountain (WTI) of the New York Commercial Exchange (NYMEX) for the past one year. [사진=인베스팅닷컴 캡처]
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The Marathon Petroleum’s Galloston Bay refinery was also closed due to a cold wave, Reuters reported. A spokesman for ExxonMobil also announced the closing of the Baytown refinery. Total SE is reportedly shutting down some of its core refineries at its Port Arthur, Texas plant, and lowering its crude oil processing scale to a minimum.
Bloomberg News pointed out, “Considering that production in the oil industry has already declined due to the Corona 19 pandemic, this shutdown (of oil refineries) predicts a contraction in supply of gasoline and propane gas across the United States and an increase in prices.”
Geopolitical tensions in the Middle East also contributed to the rise in oil prices. The Saudi Arabian government is pointing to the Yemeni rebels behind the attack at the southern Saudi airport.
Rising geopolitical tensions in Saudi Arabia, one of the world’s major oil producing countries, lead to concerns about disruption in crude oil production, affecting the rise in oil prices. In fact, oil prices surged by more than 2% on the 12th due to the heightened geopolitical unrest in the Middle East.
Carol Nakley, chief executive of energy advisory Cristol Energy, said that stocks are declining, which surged last year amid rising energy demand. The Organization of Petroleum Exporting Countries (OPEC) is not releasing millions of barrels of crude oil into the market.
Meanwhile, the U.S. Meteorological Administration issued storm warnings in 25 states, from Maine near the eastern Canadian border to Central and South Texas.
Weather experts explained that the influence of strong high pressure from the Arctic Circle has caused a lot of snow in Texas, Louisiana, and other states near the Gulf of Mexico and Oklahoma.
In particular, the governments of seven states, including Alabama, Oregon, Oklahoma, Kansas, Kentucky, Mississippi, and Texas, have declared emergencies in preparation for a cold wave.
The state of Texas has suffered an emergency circular power outage, targeting 2.6 million households, as power consumption has increased due to an unexpected cold wave. Southwest Powerpool, which supplies power to 14 states from northern North Dakota to south-central Oklahoma, has also announced limited transmission. It is reported that local residents suffered extreme cold due to a limited blackout that took place in more than 10 years.
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