Oil hits 13-month peak on supply worries

Oil prices continued to rise as the US market opened on Thursday, extending gains for the second straight day and hit a 13-month high, following a sharp drop in the US production due to cold weather, in addition to continued supply cuts by OPEC-Plus and Saudi Arabia's voluntary output cut.

US crude rose 0.6% to the highest level since January 2020 at $63.76 a barrel, after opening at $63.38, and hit a low of $63.09, and Brent crude rose more than 0.6% to the highest since January 2020 at $67.68 a barrel, after opening at $67.25, and hit a low of $67.03.

US crude gained 3.7% yesterday, and Brent crude futures rose 3.5%, their second gain in 3 days.

The US Energy Information Administration reported today that the US crude production fell 1.1 million barrels during the week ending February 19, in the largest weekly drop since the week ending August 28, 2020.

The total US oil output fell to 9.7 million barrels per day, the lowest level since August, which came due to the cold weather conditions that recently hit the US, especially Texas.

The US crude inventories rose 1.3 million barrel during the past week, worse than forecasts of a drop by 4.8 million barrels.

The OPEC-Plus alliance will meet on March 4, to discuss the latest developments in the market, and to decide April's production levels.

Reuters quoted sources in OPEC-Plus that the group will discuss a slight easing of the supply cuts starting from April after the recent prices hike, but the sources added that this step might get delayed following the latest setbacks in the battle against the Covid-19 pandemic.

With OPEC-Plus compliance to their production cuts, and the Saudi voluntary cut during February and March, have boosted prices and lowered global supply.