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Benchmark Brent crude gained $1.37, or 2.2%, to $64.72 a barrel
at 1237 GMT.
U.S. West Texas Intermediate (WTI) crude rose $1.18, or 2%, to
$61.23 a barrel.
Both contracts were at their highest level since January 2020.
"WTI clocked in at $60 a barrel this week, joining its
transatlantic peer (Brent) above the psychological level for the
first time since January 2020. At this price point, any oil
production is profitable," said Stephen Brennock of broker PVM.
Oil has been supported in the past few weeks by OPEC+ supply
curbs and hopes of a demand rebound due to COVID-19
vaccinations, but severe cold weather in Texas, the country's
largest oil producing state, has boosted the prices in recent
days.
The U.S. deep freeze is expected to disrupt production for
several days if not weeks, industry experts said, as wellheads
have frozen and refineries have been shut.
ANZ and Citigroup analysts estimated at least 2 million barrels
per day (bpd) of U.S. shale oil production had been curtailed.
Citi estimated a cumulative production loss of around 16 million
barrels through early March.
The stronger price environment has put more attention on OPEC+,
which groups OPEC, Russia and allied producers. It meets to set
policy on March 4.
"The impact on crude oil prices will largely depend on how long
the power crisis will last, but eventually prices will likely
return to the fundamentals with a focus on the global energy
demand and OPEC+," said Margaret Yang, a strategist at
Singapore-based DailyFX.
OPEC+ oil producers are likely to ease curbs on supply after
April given a recovery in prices, OPEC+ sources told Reuters.
"We believe that OPEC+ will likely take a more conservative
approach, and ease output more modestly," said ING analyst
Warren Patterson.
U.S. oil inventory data from the American Petroleum Institute
and the U.S. Energy Information Administration (EIA) will be
released on Wednesday and Thursday respectively, a one day delay
for each after this week's U.S. holiday.
Analysts polled by Reuters estimated, on average, that crude
stocks fell 2.2 million barrels in the week to Feb. 12.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Sonali Paul and Shu Zhang in Singapore; Editing by
Jason Neely and Jane Merriman)
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