People line up to fill their empty propane tanks on Tuesday, February 16, 2021, in Houston. Temperatures were below freezing on Tuesday, and many residents were left without electricity.
Brett Coomer | Houston Chronicle | AP
Energy prices continued to rise while an arctic explosion kept the South in a deep freeze on Wednesday and left up to 3 million people in the state without power.
West Texas Intermediate oil prices rose 2% in morning trading, while gasoline futures rose nearly 3%, although natural gas has declined as the crisis in Texas and several other states continued. Heating oil futures were also higher.
With “oil wells and refineries offline, we can face a significant deficit for several days, further restricting 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 just a short-term failure, which is why we are not seeing a more significant impact on oil prices, which are starting to show signs of overbought,” added Erlam. “This shouldn’t be a big shock after a 70% hike since the beginning of November. A lot of optimism about the economic recovery is being quoted, so the market may be prepared for a small correction.”
Exceptionally severe winter storms have 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.
Power cuts have raised questions about the stability of the power grid, prompting some members of Congress to hold hearings on why the system failed.
“Ultimately, those responsible for the operation and management of our power grid will have to respond to the blatant collapse of our inadequate public communication and energy infrastructure,” said Representative Van Taylor, R-Texas, in a statement.