Oil climbs 1% on US storm disruption, Kazakh oilfield’s slow restart

Oil prices rose by around 1% on Tuesday as producers reeled from a ‌winter storm that hobbled crude production and affected refineries on the U.S. Gulf Coast over the weekend, with the slow restart of output from the Tengiz oilfield in Kazakhstan further boosting prices.
Brent crude futures were up 61 cents or 0.93%, at $66.20 a barrel. U.S. West Texas Intermediate crude was up 59 cents or ‌0.97%, at $61.22 a barrel.

U.S. oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated, as a severe winter storm swept across the country, straining energy infrastructure and power grids.

“The cold weather in the U.S. will likely cause quite significant ‍drawdowns in oil stocks over the next few weeks, particularly if this weather persists,” said Tamas Varga, an oil analyst at brokerage PVM.

This could boost prices in the coming days, he said, adding that some traders are also likely to be taking profit on heating oil, which has risen sharply in recent days.

Elsewhere, Kazakhstan’s biggest oilfield, Tengiz, is likely ‍to restore less than half of its normal production by February 7 as it slowly recovers from a fire and power ‌outage, ‌two sources familiar with the matter told Reuters.

“The recovery of Tengiz production seems to be happening slower than earlier expected, keeping the oil market tighter,” said Giovanni Staunovo, an analyst at UBS, adding that the weaker U.S. dollar was lending some support.
However, the CPC, which operates Kazakhstan’s main exporting pipeline, said it returned to full loading capacity at its terminal on the Russian Black Sea coast after maintenance was completed at one of its three mooring points.

A U.S. aircraft carrier and supporting warships have arrived in the Middle East, two U.S. officials told Reuters on Monday, expanding President Donald ‍Trump’s capabilities to defend U.S. forces, or potentially take military action against Iran.

Tensions between Tehran and Washington coupled with no news on the Ukraine-Russia peace deal are keeping a floor under crude, said Dennis Kissler, senior vice president of trading at BOK Financial.

Meanwhile, OPEC+ is set to keep its pause on oil output increases for March ‍at a meeting on February 1, three OPEC+ delegates told Reuters.