The past week began with abnormal cold weather in Texas, where the temperature dropped to -18 degrees, a record high since 1989.

Immediately, oil production in the Permian Basin collapsed by a million barrels. Extreme cold weather caused equipment breakdowns at several gas processing plants in the Permian Basin and the Anadarko Basin in Oklahoma. The cold weather has led to a sharp increase in fuel demand. WTI (West Texas Intermediate) oil quotes rose by two percent (to $ 60.6 per barrel), a record high for this mark of oil since January last year.

On Tuesday the oil market saw some correction after the Brent quotes renewed their highs since January 2020. The price of April futures for North Sea Brent oil mixture fell by 0.28%, to $ 63.12 per barrel, March futures for WTI - grew by 0.71%, to $ 59.89 per barrel. Investors continued to playback the reports of difficulties with oil production in the United States that arose due to abnormally low temperatures in the region. According to Bloomberg, oil production in the United States dropped by more than 2 million barrels per day. Reports of production cuts supported oil prices: on the eve, the price of Brent crude exceeded $ 63 per barrel for the first time since January 22, 2020. In general, the indicator was growing during two trading sessions. However, most analysts were of the opinion that the rapid rise in prices does not have long-term prospects.

Despite cautious forecasts, oil prices continued to rise on Wednesday amid a record drop in US production due to severe frosts. The total volume of oil production in the United States fell by a third - the highest in history - amid the suspension of wells due to unprecedented freezing temperatures throughout the central part of the country, Bloomberg reported, citing estimates of oil traders and industry representatives. According to them, oil production decreased by about 3.5 million barrels per day or more nationwide. Before the cold snap, the United States was producing about 11 million b / d, according to the latest government figures. Only in the Permian Basin in Texas, the largest oil-bearing region in the United States, production collapsed by 65%. As a result, the trading ended with the quotations reaching the “pre-COVID” level - the price of Brent for the first time since January 21, 2020 exceeded the level of $ 65 per barrel.

Nevertheless, the week ended with a strong decline. Due to the resumption of production in Texas, oil quotations lost about 2.5%. The price of April futures for North Sea Brent crude oil mixture fell by 1.91%, to 62.71 dollars per barrel, March futures for WTI - by 2.43%, to 59.05 dollars per barrel. The decline in oil prices is also partly corrective, since the beginning of February Brent crude oil has risen in price by 13.6%, WTI - by 14.6%. Meanwhile, Baker Hughes reported that the number of operating oil rigs in the United States for the week ended February 19, decreased by one, to 305 units. Despite the fact that this is the first decline in 12 weeks, investor sentiment has not improved.