Oil Prices Rise as US Winter Storm Disrupts Supply

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Oil prices.

Oil prices edged higher during Asian trading on Wednesday, extending gains from the previous session after severe winter weather disrupted production across the United States, raising concerns over tighter supply.

Crude prices were also supported by a weaker US dollar, which slipped to its lowest level in almost four years this week. Meanwhile, geopolitical tensions remained in focus after US President Donald Trump said a second naval fleet was being deployed to the Middle East amid ongoing strains with Iran.

Brent crude futures for March delivery rose by 0.1% to $67.66 a barrel, their highest level in nearly four months. US benchmark West Texas Intermediate gained 0.2% to $62.53 a barrel.

This week’s rise in oil prices has largely been driven by a powerful winter storm that swept across the United States, disrupting crude output in several regions. Exports from the US Gulf Coast fell to zero as heavy snowfall and sub-zero temperatures affected large parts of the country.

According to Reuters estimates, US oil production declined by around two million barrels per day over the weekend. The supply disruption has led traders to anticipate sharp falls in US crude inventories in the coming weeks, signalling tighter supply in the world’s largest fuel-consuming nation.

Figures released by the American Petroleum Institute (API) on Tuesday showed that US crude inventories unexpectedly fell last week. Stocks declined by approximately 250,000 barrels, against expectations of a 1.45 million-barrel increase. API data is often seen as a precursor to the official inventory figures due later on Wednesday.

Oil markets also drew support from the weaker dollar, as a softer US currency tends to lift prices for dollar-denominated commodities. The dollar index fell to its lowest level in nearly four years on Tuesday, amid investor concerns over US economic uncertainty, the Federal Reserve’s policy outlook and volatile trade and geopolitical policies under President Trump.

The Federal Reserve is widely expected to leave interest rates unchanged at the end of its meeting later on Wednesday, with markets closely watching comments from Chair Jerome Powell for guidance on monetary policy for the year ahead.


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