Oil prices rose more than 2% on Wednesday, boosted by a huge drop in U.S. fuel inventories and expectations that OPEC+ producers might decide against increasing output when they meet this week.
U.S. gasoline stocks fell last week by the most on record and refining output fell to a record low in the wake of a deep freeze in Texas that shut production.
Gasoline inventories fell to 243.5 million barrels, the U.S. Energy Information Administration said, while distillate stockpiles fell by the most since 2003 to 143 million barrels.
“It was a giant storm,” Bob Yawger, director of energy futures at Mizuho, said of the Texas freeze. “It shut down every refinery in refinery row, basically, that mattered and it froze in production.”
Crude inventories rose by 21.6 million barrels, the most on record, to 484.6 million barrels, EIA said. Refining capacity use fell to just 56% of overall capacity, the lowest on record, as the U.S. Gulf Coast’s refining capacity use plunged to 40.9%, the lowest ever.
Brent crude rose $1.37, or 2.2%, to settle at $64.07 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.53, or 2.6%, to settle at $61.28 a barrel.
Earlier, oil prices jumped after Reuters, citing three sources, reported that the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and allies including Russia is considering rolling over production cuts from March into April rather than raising output.
The group had previously been widely expected to ease the production cuts on Thursday.
Kuwaiti Oil Minister Mohammad al-Fares said the market was being supported by optimism over vaccinations.
Biden said he hoped that the United States would be “back to normal” at this time next year and potentially sooner.