(New York) Oil prices ended sharply higher on Monday, due to the cold snap which slowed production and refining in the United States coupled with continued tensions over supplies in the Red Sea.
The price of a barrel of Brent from the North Sea, for delivery in March, increased by 1.90% and rose slightly above the $80 mark to $80.06.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in February, which is the last day of trading, gained 2.42% to $75.19.
Shale oil production in the United States is being slowed “due to a cold spell in parts of the United States,” DNB analysts said.
The cold that hit much of the country affected wells and “production in North Dakota and Texas,” said Matt Smith of Kpler. Refining activities were affected by the frost to a lesser extent around the Gulf of Mexico.
Furthermore, crude oil prices have increased, “as markets continue to be cautious in the face of supply disruptions in and around the Red Sea,” recalls Michael Hewson, analyst at CMC Markets.
In the fourth month of the war between Israel and Hamas, the risks of a regionalization of the conflict persist. The Pentagon announced on Saturday that it had “destroyed” a Houthi anti-ship missile, in new strikes described as “self-defense” against these Yemeni rebels, supported by Iran, who carry out repeated attacks against merchant ships in the Red Sea and in the Gulf of Aden.
In addition, on the front of the war in Ukraine, the Kremlin accused Kyiv on Monday of having struck a gas terminal the day before in the port of Ust-Luga near Saint Petersburg.
“With this Ukrainian drone attack, it adds a new element to geopolitical tensions,” which is pushing prices up, noted Matt Smith.
At the start of the session, barrel prices were compressed due to the restart of a major oil field in Libya, before recovering, note DNB analysts.
The National Oil Company (NOC) in Libya announced on Sunday the resumption of oil production at the al-Sharara field after a two-week shutdown following protests at this site, as well as the lifting of the “state of force majeure”.
Located approximately 900 km south of Tripoli, al-Charara normally produces 315,000 barrels per day, out of national production which has fallen to more than 1.2 million barrels per day (compared to 1.5 to 1.6 million before the Revolution of 2011).
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, lost 2.93% to 27.59 euros per megawatt hour (MWh), after hitting 26.60 euros, its lowest since the end of July.