People are lining up to fill their empty propane tanks on Tuesday, February 16, 2021 in Houston. Temperatures remained below freezing on Tuesday and many residents were without electricity.
Brett Coomer | Houston Chronicle | AP
Energy prices continued to soar as a polar blast left the south in deep freezing on Wednesday, leaving 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 fell as the crisis in Texas and several other states continued. Fuel oil futures were also higher.
Now that “oil wells and refineries are offline, we could face a significant shortage for several days, further restricting supply at a time when it is already limited and demand is expected to return,” wrote Craig Erlam senior market analyst at OANDA .
“However, this is only a momentary outage and therefore we are not seeing a more significant impact on oil prices, which are starting to show signs of being sold out,” added Erlam. “This shouldn’t come as much of a shock after a 70% rally since early November. There’s a lot of optimism about the economic recovery now priced in, so the market is poised 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 outage raised questions about the stability of the power grid, prompting some members of Congress to hear why the system failed.
“Ultimately, those responsible for the operation and management of our energy network will have to answer for the blatant collapse of our energy infrastructure and inadequate communication with the public,” said Rep. From Taylor, R-Texas, in a statement.