Winter storm in the US triggers oil price surge due to production halt

Global oil prices rose by 3% after a powerful Arctic storm “Fern” paralyzed production in key US energy regions. Extreme frosts led to the freezing of wells and a complete halt of crude oil exports from Gulf of Mexico ports over the past weekend. This was reported by Reuters, writes UNN.

DetailsAccording to analysts at PVM and City Index, American producers temporarily lost up to 2 million barrels per day, which is approximately 15% of the total national production. The Williston Basin in North Dakota and the Permian Basin in Texas were most affected, where production fell to record lows due to equipment icing and power outages.

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Crude oil and liquefied natural gas (LNG) exports from Gulf Coast terminals dropped to zero on Sunday, January 25. Although shipments began to gradually resume on Monday, logistical delays have already created a supply deficit in the physical market.

Global exchange reaction and price indicatorsAmid fears of prolonged supply disruptions, the value of benchmark oil grades showed confident growth.

• Brent: rose by $1.98 (3.02%) to $67.57 per barrel.

• WTI: added $1.76 (2.9%) to $62.39 per barrel.

Market experts warn that if the frosts last longer than a week, US oil reserves could significantly decrease, pushing prices to further increases. An additional factor supporting fuel prices remains the high demand for fuel oil and gas for heating in the affected states, where more than 750,000 consumers remain without electricity. 

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