Crude oil prices have shown great vigour at the fourth trading session of the week, continuing an almost week-long rally to surpass 13-month highs.
With more than 20 percent of U.S. refining output and a million barrels of oil output closed down, concerns that a rare cold snap in the U.S. state of Texas could disrupt crude output in the United States for days or even weeks prompted investors to preemptively buy energy.
Brent crude climbed 89 cents, or 1.4 percent, to $65.23 a barrel by 06:24 WAT on Thursday, reaching its highest level since January 20, 2020. US West Texas Intermediate (WTI) crude futures gained 66 cents, or 1.1 percent, to $61.80 a barrel, marking its highest since January 8, 2020.
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Both benchmarks rose about $1 on Wednesday and have gained more than 6 percent since their close last Thursday.
“Oil prices got a boost again from expectations that the disruptions of Texas oil producers and refiners due to the cold storm could last for a while,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“With hopes of fresh US economic stimulus and wider rollouts of the COVID-19 vaccine, oil prices are expected to stay on the bullish trend,” he said while predicting that WTI could test a key $65 level.
Oil’s price rally in recent months has also been aided by a shortage of global supplies, due largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the OPEC+ grouping, which includes Russia.