At 06:30 GMT, the front-month March WTI contract on Nymex was at $59.73/bl. The contract had traded as low as $58.59/bl earlier in the day, down by 3.19pc from its settlement yesterday. WTI had settled above $60/bl on 16 February for the first time since 7 January last year on the prospect of increasing oil demand at the time.
The Ice front-month April Brent contract also fell, trading as low as $62.09/bl, a decline of 2.88pc from its settlement yesterday.
More than 2.1mn b/d of Texas refining capacity was confirmed shut down and at least 5mn b/d of capacity reduced in some way this week by storm conditions affecting refiners stretched from the Texas coastline to the far west desert border in El Paso. The affected Texas refiners represent nearly a quarter of US refining capacity, linked to every US energy region and exporters to markets across the globe. Cold weather conditions and natural gas curbs have also affected refining operations in Oklahoma and Louisiana.
State-ordered curbs will limit power and natural gas supplies to Texas refiners into next week as the electric grid struggles to heat homes and power critical infrastructure following this week’s severe winter storm.
Texas’ electric grid operator the Electric Reliability Council of Texas (ERCOT) yesterday said it is able to handle demand and has instructed all utilities to restore power to customers but warned of more freezing weather last night. Power disruptions since 14 February have left millions in the dark and cold, and crippled crude and natural gas production.
Argus
