People line up to fill their empty propane tanks Tuesday, Feb. 16, 2021, in Houston. Temperatures stayed below freezing Tuesday, and many residents were without electricity.
Brett Coomer | Houston Chronicle | AP
Millions in Texas continued to face power outages on Wednesday for the third straight day as the deadly storm that brought storm and ice to the region continues to wreak havoc on the state’s energy infrastructure.
An estimated three million barrels per day of oil production has been taken offline. Power production from natural gas to coal to renewables has been impacted, just as consumers turn up their thermostats amid the frigid temperatures.
West Texas Intermediate crude futures prices rose as much as 2% to trade at $61.25 per barrel, before easing off that level. International benchmark Brent crude was slightly higher at $63.51 per barrel. Gasoline futures were up nearly 1% though natural gas edged lower after jumping on Tuesday. Heating oil futures were higher.
With “oil wells and refineries offline, we could be facing a significant shortfall for a number of days, further tightening supply at a time when it has already been restricted and demand is expected to return,” wrote Craig Erlam senior market analyst at OANDA.
“This is only a short-term glitch though which is why we’re not seeing a more significant impact on oil prices, which are starting to show signs of being overbought,” Erlam added. “This shouldn’t come as a major shock after a 70% rally since early November. A lot of optimism around the economic recovery is now priced in so the market may be primed for a minor correction.”
The unusually harsh winter storms left more than 3 million in Texas without power, along with nearly 100,000 in Kentucky and more than 70,000 in West Virginia, according to PowerOutage.us.
The power outages raised questions about the stability of the electric grid, pushing some members of Congress to call for hearings on why the system failed.
“Ultimately, those responsible for the operation and management of our energy grid will have to answer for the glaring collapse of our energy infrastructure and inadequate communication to the public,” Rep. Van Taylor, R-Texas, said in a statement.
The energy sector was little changed during morning trading on Wednesday. The sector gained 2.26% on Tuesday, making it the best-performing S&P group.
