The U.S. benchmark oil price rallied above $60 per barrel early on Monday, the highest price since January last year, as an Arctic winter blast swept through Texas, raising concerns about potential disruptions to shale production in the top oil-producing state and logistics on the U.S. Gulf Coast.
As of 9:26 a.m. ET on Monday, the West Texas Intermediate Crude price had rallied 1.38 percent at $60.26. Brent Crude prices were also up and broke above $63 per barrel, at $63.11, up 1.12 percent on the day.
Winter storms in Texas have raised concerns about disruptions to shale supply, analysts say.
The price of oil on Monday "resumed its tightening supply-led rally, now with the added boost from an arctic blast in the US reaching all the way down to Texas to potentially disrupt flows from the Permian, America's largest shale patch," Saxo Bank analysts said early on Monday.
WTI prices have now rallied by 16 percent in February alone, after both benchmarks ended last week their longest streak of consecutive daily gains in two years.
The rally resumed on Friday and continued on Monday amid expectations of a further drawdown in global inventories and hopes that the U.S. would still pass the stimulus package.
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In recent weeks, oil prices have also been supported by increased vaccination rates as well as by falling COVID-19 cases and hospitalizations in the world's biggest economy, the United States.
The current price levels, if they hold until early March, could push some OPEC+ producers to demand more aggressive easing of the cuts when the group will meet to discuss oil production from April 1, ING strategists Warren Patterson and Wenyu Yao said on Monday.
"At current price levels, one would expect that a number of producers would push for a further easing, and this is the stance we would expect to see taken from Russia," the strategists said, adding that "However, OPEC+ will be keen to avoid a repeat of the meeting in March last year, when the previous deal fell apart."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More