Oil gains as US production slowly returns after freeze By Reuters

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© Reuters. FILE PHOTO: The sun shines behind a crude oil pump jack in the Permian Basin of Loving County

TOKYO (Reuters) – Oil prices rose on Monday as a slow return to production that was curtailed by frigid conditions raised supply concerns just as demand is returning from the depths of the coronavirus pandemic. it was up 76 cents, or 1.2%, to $ 61.67 a barrel at 0104 GMT, after gaining nearly 1% last week. US oil rose 74 cents, or 1.3%, to $ 59.98 a barrel, after falling 0.4% last week. Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of production, analysts estimated. Oil field crews will likely take several days to thaw valves, reboot systems, and begin oil and gas production. Refineries on the U.S. Gulf Coast are assessing damage to facilities and it may take up to three weeks to restore most of their operations, analysts said, as low water pressure and gas and power losses make reboots difficult. “With three-quarters of the hydraulic fracturing equipment retired, the probability of a quick restart is low,” ANZ Research said in a note. “In the longer term, the drop in capex at US shale oil companies this year will keep drilling activity subdued, causing production to remain below pre-pandemic levels,” ANZ said. For the first time since November, US drilling companies reduced the number of oil rigs in operation due to the cold and snow that engulfed Texas, New Mexico and other energy producing centers. [RIG/U]

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