By Gina Lee
Investing.com – Oil was down Friday morning in Asia, continuing Thursday’s losses over growing worries that refineries shut by the cold snap in Texas and surrounding areas will take time to reopen, in turn denting crude oil demand.
Brent oil futures slid 1.64% to $62.88 by 11 PM ET (4 AM GMT) and WTI futures slid 1.90% to $59.37, falling just below the $60 mark.
Both Brent and WTI contracts climbed to 13-month highs on Thursday, boosted by the unprecedented cold snap. With as much as one-third of U.S. production reported to be shut down, the focus is shifting to the impact on producers.
“The market is concerned about the refinery outages in Texas, where arctic weather has caused power outages and frozen wells and pipes,” ANZ Research said in a note.
The lack of demand from refineries will likely lead to builds in crude stocks over coming weeks, even though around 3.5 million barrels per day (bpd) of U.S. oil output has been shut, the note added.
Some U.S. refineries could bring forward maintenance work normally scheduled for the spring, ahead of the summer driving season, Citi analysts said in their own note.
“Refinery outages could be deeper and longer lasting, especially ahead of the spring maintenance season, as some plants could decide to anticipate planned turnarounds of roughly 500-k b/d on aggregate over the next month,” the Citi note added.
U.S. crude oil supply data from the U.S. Energy Information Administration showed a draw of 7.258 million barrels in the week to Feb. 12. This was larger than the 2.429-million-barrel draw in forecasts prepared by Investing.com and the 6.644-million-barrel draw recorded for the previous week.
Data from the American Petroleum Institute released a day earlier showed a draw of 5.8 million barrels.