Oil extends rally as output slow to recover from Texas storms
By Laila Kearney NEW YORK (Reuters) - Oil prices gained about 3% on Monday, driven by the expected slow return of U.S. crude output after last week's deep freeze in Texas shut in production
By Laila Kearney
NEW YORK (Reuters) - Oil prices gained about 3% on Monday, driven by the expected slow return of U.S. crude output after last week's deep freeze in Texas shut in production.
U.S. producers shut anywhere from 2 million to 4 million barrels per day of oil output due to the bad weather in Texas and other oil producing states, and the unusually cold conditions may have damaged installations that could keep output offline longer than expected.
Brent crude was up $2.04, or 3.2%, at $64.95 a barrel by 1:50 p.m. EST (1850), while U.S. oil rose $2.01, or 3.4%, to $61.25 a barrel. The U.S. benchmark crude contract for March delivery expires on Monday, and the more widely-traded April contract was up $1.91, or 3.2%, at 61.19 a barrel.
Shale oil producers in the region could take at least two weeks to fully restart normal output, sources said, as damage assessments and power disruptions slow their recovery.
"The significant loss of both crude and gasoline production suggests more upside and likelihood of new highs possibly within a one-week time frame," said Jim Ritterbusch of consultancy Ritterbusch and Associates.
But with limited refining capacity, and the expectation that refiners, too, could take weeks to return to normal, oil prices may stumble from a lack of demand, said Bob Yawger, director of energy futures at Mizuho in New York.
"The market is behaving as if the refiners are going to come online quicker than the headlines would lead you to believe," said Yawger. Gasoline crackspreads, an indicator of refiners' margins have dropped by 5%.
For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres, signalling even tighter supplies ahead. [RIG/U]
OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.
"Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production," said SEB chief commodity analyst Bjarne Schieldrop.
(Additional reporting by Noah Browning and Aaron Sheldrick; Editing by Jason Neely and Emelia Sithole-Matarise, David Gregorio and Jane Merriman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.