Oil Prices Surge as Winter Storm Fern Deepens US Supply Disruptions

Oil prices rose on Wednesday as concerns mounted over disruptions to U.S. energy supplies after Winter Storm Fern severely curtailed American crude oil production and exports. Prices also drew support from heightened geopolitical tensions in the Middle East and declining output in Kazakhstan.

Analysts and traders estimate that U.S. producers lost up to 2 million barrels per day, nearly 15% of total national output, over the weekend as the powerful winter storm strained energy infrastructure and electricity grids, according to Reuters.

Exports of U.S. crude oil and liquefied natural gas (LNG) from Gulf Coast ports fell to zero on Sunday, ship-tracking service Vortexa reported.

Storm Fern is being described as one of the most severe cold waves and winter storms in decades, leaving widespread damage across large parts of the United States.

As of Tuesday evening, at least 21 people had died, while more than 800,000 homes were left without electricity. Power outages are expected to persist for several days, as many affected regions lack the infrastructure and resources to cope with prolonged freezing conditions and heavy snowfall.

Brent crude futures were up 11 cents, or 0.2%, at $67.68 a barrel, while U.S. West Texas Intermediate (WTI) gained 19 cents, or 0.3%, to $62.58 a barrel.

Latest Oil Prices:

WTI Crude • 63.33 +0.94 +1.51%

Brent Crude • 68.52 +0.95 +1.41%

Murban Crude • 67.02 +0.32 +0.48%

Louisiana Light • 61.69 -0.23 -0.37%

Bonny Light • 78.62 -2.30 -2.84%

Mars US • 69.79 -0.88 -1.25%

Gasoline • 1.895 +0.030 +1.59%

Natural Gas • 7.200 +0.246 +3.54%

Both benchmarks had climbed around 3% on Tuesday, reflecting growing supply concerns.

Additional support came after the arrival of a U.S. aircraft carrier in the Middle East, amid escalating tensions with Iran, reinforcing geopolitical risk premiums in oil markets.

At the same time, output disruptions in Kazakhstan added to supply worries. Sources familiar with the situation told Reuters that production at the Tengiz oil field, the country’s largest, is expected to recover to less than half of normal capacity by February 7, following a fire and power outage.

This contrasts with statements from CPC, the pipeline operator handling around 80% of Kazakhstan’s oil exports, which said its Black Sea terminal had returned to full capacity after maintenance work at one of its mooring points.

Despite the current supply-driven rally, analysts warn that upward momentum may be short-lived.

Toshitaka Tazawa, an analyst at Fujitomi Securities, said that once supply concerns ease, selling pressure is likely to return, particularly given expectations of a global oil surplus later this year.

“Even with geopolitical risks, including tensions in the Middle East, surplus supply could keep WTI prices around $60 per barrel for the time being,” Tazawa said.