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Oil Prices Climb as Deep Freeze Shuts U.S. Oil Wells

Oil prices rose on Tuesday as a cold front shut wells and refineries in Texas, the biggest crude producing state in the United States, the worlds biggest oil producer.

Prices also gained as Yemens Iranaligned Houthi group said it struck airports in Saudi Arabia with drones, raising supply concerns in the worlds biggest oil exporter, and on optimism for a global economic recovery amid accelerated COVID19 vaccine rollouts.

Brent crude was up 14 cents, or 0.2, at 63.44 a barrel at 0740 GMT, after rising to its highest since January 2020 in the previous session.

U.S. West Texas Intermediate WTI crude futures gained 61 cents, or 1, to 60.08 a barrel. WTI did not settle on Monday because of a U.S. federal holiday. Prices will settle at the close of trading on Tuesday.

The unexpected U.S. supply disruption provides another short term price recovery bridge that has likely taken oil prices to a level where markets were eventually heading but just a little bit quicker than expected, Stephen Innes, chief global markets strategist at Axi said in a note on Tuesday.

The cold weather in the United States halted Texas oil wells and refineries on Monday and forced restrictions on natural gas and crude pipeline operators.

The rare deep freeze prompted the states electric power suppliers to impose rotating blackouts, leaving nearly 3 million homes and businesses without power.

Texas produces roughly 4.6 million barrels of oil per day and is home to 31 refineries, the most of any…

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