Global crude oil prices moved higher in early trading as severe winter conditions in the United States curtailed production and export activities, while sustained weakness in the U.S. dollar further supported commodity prices.
Brent crude, the international benchmark, traded at $66.95 per barrel, reflecting a 0.8 per cent increase from the previous session’s close of $66.42. Similarly, U.S. benchmark West Texas Intermediate (WTI) rose by approximately 0.85 per cent to $62.82 per barrel, compared with $62.29 recorded in the prior trading day.
The upward momentum in oil prices followed extreme weather conditions across large portions of the United States, particularly the Gulf Coast region, which disrupted crude oil production and exports. A powerful winter storm accompanied by heavy snowfall and sub-zero temperatures has resulted in widespread operational shutdowns across energy infrastructure hubs.
According to U.S. authorities, the death toll linked to the cold wave has climbed to 30, with fatalities largely attributed to traffic accidents and prolonged exposure to freezing conditions. The National Weather Service reported snowfall depths exceeding 50 centimetres in several areas, while wind chill readings dropped to as low as minus 31 degrees Celsius.
The adverse weather severely affected power supply and transportation networks. Data from power outage monitoring platforms showed that over 554,000 households and businesses were left without electricity, while more than 12,000 flights were cancelled or delayed nationwide. These conditions forced U.S. Gulf Coast crude export operations to slow to near standstill levels.
Market analysts estimate that roughly 2 million barrels per day of oil supply were temporarily shut in over the weekend due to the freezing temperatures. Officials have cautioned that the cold spell, impacting close to two-thirds of the country, is likely to persist, raising concerns over extended supply disruptions.
The supply-side shock has reinforced expectations of tighter oil availability in the world’s largest oil-consuming nation, adding upward pressure on prices amid already fragile market balances.
Further strengthening the bullish outlook, data from the American Petroleum Institute (API) showed that U.S. commercial crude inventories declined by 247,000 barrels in the most recent reporting week. This contrasted sharply with market forecasts that had anticipated a 1.45 million-barrel build, signalling resilient demand dynamics despite economic uncertainties.
Oil prices also benefited from a softer U.S. dollar. The dollar index slipped to its lowest level in nearly four years, weighed down by concerns surrounding the U.S. economic outlook, uncertainty ahead of the Federal Reserve’s interest rate decision, and investor unease over U.S. President Donald Trump’s trade and geopolitical policy direction.
A weaker dollar typically makes dollar-denominated commodities more attractive to holders of other currencies, supporting demand and pricing. Analysts expect continued softness in the greenback to provide near-term support for oil prices.
Market participants are now closely monitoring the U.S. Federal Reserve’s policy announcement scheduled later in the day. While the central bank is widely expected to keep interest rates unchanged, investors are focusing on the accompanying statement and forward guidance for clues on the future path of monetary policy.
