The Texas cold snap that has left millions in the South shivering and without heat is also wreaking havoc on energy markets.
Brent oil surged above $60 a barrel for the first time in more than a year Tuesday as power outages related to a crippling winter storm and deep freeze that brought much of the U.S. South to a standstill disrupted crude production and forced the shutdown of some of the nation’s biggest oil and petroleum refineries.
Futures in London traded above $63 a barrel after rising 1.4% Monday, their highest levels in 13 months, as the unusual winter storm and cold snap crippled power systems in Texas, Louisiana, Oklahoma and other parts of the south – in turn halting production of as much as 1.7 million barrels a day of oil output and forcing pipelines to declare force majeure.
Natural-gas futures rose 5.7%. Since natural gas is burned to generate electricity and heat, its price tends to rise during cold snaps. Gasoline futures rose 4.3%. Several large refiners, which convert crude oil into usable fuels, have shuttered in response to the low temperatures and adverse conditions, according to media reports.
The brutally cold weather, which has transformed the normally temperate southern plains into a rare freeze, toppled century-old records across the region, causing rare snow, sleet and ice conditions to prevail in typically warm locales including Houston and Galveston, Texas, and promising one of the coldest Fat Tuesday’s on record for New Orleans.