Oil prices fell on Tuesday even as a severe winter storm disrupted crude output and affected refineries along the US Gulf Coast.
Brent crude futures dropped 28 cents, or 0.4%, to $65.31 per barrel, while US West Texas Intermediate crude fell 24 cents, or 0.4%, to $60.39 per barrel.
Analysts estimate that US oil producers lost up to 2 million barrels per day, or roughly 15% of national crude output, over the weekend due to freezing conditions. The storm also strained power grids and delayed operations at multiple Gulf Coast refineries.
Daniel Hynes, an analyst at ANZ, noted that supply disruptions could still impact fuel availability, despite the price decline. “Fuel supply concerns remain as refineries work to restore normal operations after the storm,” he said.
Geopolitical tensions also influenced market sentiment. A US aircraft carrier and accompanying warships arrived in the Middle East, raising concerns about potential military action against Iran. Hynes added that these tensions keep supply risks on traders’ radar.
Meanwhile, OPEC+ members are expected to maintain their pause on increasing crude output for March. Eight key members, including Saudi Arabia, Russia, UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman, plan to discuss production levels on February 1. Recent drops in Kazakhstan’s crude output contributed to the upward pressure on prices in early trading.
Global efforts toward clean energy continued as European nations, including Germany, Britain, and Denmark, signed a North Sea Summit pact on Monday to boost renewable energy initiatives.
Overall, the combination of weather-related production losses, geopolitical risks, and controlled crude output from OPEC+ members has created a complex market scenario, keeping oil traders cautious.
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