WTI Crude, the U.S. oil benchmark, jumped to over $92 per barrel early on Friday—its highest level since 2014, amid the Russia-Ukraine crisis and a deep freeze in Texas that disrupted some Permian oil production.
WTI broke this week the $90 a barrel mark for the first time since 2014 and continued to rally early on Friday. As of 7:46 a.m. EST, WTI Crude had jumped 2.04% on the day at $92.11, while Brent Crude was close to breaking $93 a barrel, trading up 2.00% at $92.93.
Both WTI and Brent were on track to post their seventh consecutive weekly gain.
The freezing weather in the United States, which had spread from the Midwest south to Texas, disrupted operations at some Permian oil wells, as icy roads have prevented some trucking operations crucial for oil production.
Due to the winter weather, a large producer in the Permian had to shut in 4,000 barrels per day (bpd) of its crude production, a source with knowledge of the situation told Bloomberg late on Thursday. The freezing storm has also affected some wells in the largest U.S. shale play.
In addition to supply disruptions in Texas, oil prices were supported on Friday by the tension between the United States and Russia over Ukraine.
On Thursday, U.S. State Department spokesperson Ned Price said that “the United States has information that Russia is planning to stage fabricated attacks by Ukrainian military or intelligence forces as a pretext for a further invasion of Ukraine.”
“Russia has signaled it’s willing to continue diplomatic talks as a means to de-escalate, but actions such as these suggest otherwise,” Price added.
The seventh consecutive weekly gain in oil prices is “driven by the current tight supply outlook, geopolitical tensions and freezing weather in Texas hurting some oil supplies,” Saxo Bank said on Friday.
“OPEC+ this week agreed to raise production by another 400k barrels per day in March but at the same time failed to address the growing gap between quotes and what is being produced,” the bank’s strategists added.
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By Tsvetana Paraskova for Oilprice.com
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