Oil Prices Edge Higher over Supply Risk, Weak U.S Dollar
Oil prices edged higher in the global commodity market as extreme cold weather disrupted crude production and exports from the US Gulf Coast, while a weaker US dollar provided additional support.
International benchmark Brent crude traded at $66.95 per barrel, up about 0.8% from the previous close of $66.42. US benchmark West Texas Intermediate (WTI) rose around 0.85% to $62.82 per barrel, compared with $62.29 in the prior session.
A severe snowstorm and freezing temperatures across large parts of the US have pushed the death toll to 30, with authorities citing traffic accidents and prolonged exposure to extreme cold as the main causes.
The National Weather Service said snow depth exceeded 50 centimeters in some areas, while wind chill temperatures dropped as low as minus 31 degrees Celsius.
More than 554,000 people were left without electricity, and over 12,000 flights nationwide were canceled or delayed, according to power outage tracking data. Adverse weather conditions also brought crude oil exports from the US Gulf Coast close to a standstill.
Market estimates indicated that around 2 million barrels per day of oil supply were temporarily taken offline over the weekend. Officials warned that the cold wave, affecting roughly two-thirds of the country, is expected to persist in the coming days, with hazardous travel conditions likely to continue.
Supply-side disruptions in the US strengthened expectations of tighter supply in the world’s largest oil-consuming country, putting upward pressure on oil prices.
The American Petroleum Institute (API) projected that US commercial crude oil inventories fell by 247,000 barrels last week, defying market expectations of a 1.45 million-barrel increase. The unexpected decline signaled resilient demand in the US.
The weaker US dollar also buoyed oil prices. The dollar index slipped to its lowest level in nearly four years on concerns over uncertainties in the US economy, expectations surrounding the Federal Reserve’s (Fed) interest rate decision, and worries related to US President Donald Trump’s trade and geopolitical policies.
The ongoing softness in the dollar is expected to bolster oil demand and continue to exert upward pressure on prices.
Meanwhile, markets are closely watching the Fed’s interest rate decision due later today, with expectations that policymakers will leave rates unchanged, while investors focus on the statement and forward guidance. Nigeria’s Foreign Reserve Climbs, Reaches Highest in 8 Years
