Oil costs slid as a lot as 2percentin early commerce on Friday, including to in a single day declines, on worries that refineries shut by an enormous freeze within the U.S. South will take a while to revive operations and dent crude demand.
U.S. West Texas Intermediate (WTI) crude futures fell$1.21, or 2%, to $59.31 a barrel at 0157 GMT, after declining 1percenton Thursday.
Brent crude futures dropped $1.07, or 1.7%, to$62.86 a barrel, after declining 0.6% on Thursday.
Each benchmark contracts rallied to 13-month highs on Thursday pushed by the historic freeze in U.S. southern states. Whereas analysts estimate the intense chilly has shut in as a lot as one-third of U.S. crude manufacturing, consideration has now turned to the affect on refiners.
“The market is anxious in regards to the refinery outages in Texas, the place arctic climate has induced energy outages and frozen wells and pipes,” ANZ Analysis mentioned in a observe.
The dearth of demand from refineries will probably result in builds in crude shares over coming weeks, though round 3.5million barrels per day (bpd) of U.S. oil output has been shut,ANZ mentioned.
Citi analysts mentioned in a observe that some U.S. refineries may carry ahead upkeep work usually scheduled for the spring, forward of the summer time driving season.
“Refinery outages may very well be deeper and longer lasting,particularly forward of the spring upkeep season, as some crops may resolve to anticipate deliberate turnarounds of roughly500-k b/d on mixture over the subsequent month,” Citi analysts mentioned.
U.S. crude stockpiles fell greater than anticipated within the week toFeb. 12, earlier than the freeze, with inventories down by 7.3 million barrels to 461.8 million barrels, their lowest since March, the Vitality Info Administration reported on Thursday.