The Arctic blast moving across Texas cut power to millions of residents. It also forced major refining and oil distribution operations to shut down, with Houston’s major shipping channel closed overnight and at least a fifth of U.S. refining output offline.
About 500,000 to 1.2 million bpd of crude production has also been shut, including in the Permian, the largest U.S. oilfield, and it could be weeks before it is fully restored, industry analysts said.
The cold snap could last until Saturday.
Electricity prices in Texas continued to surge, as utilities scrambled to meet heating demand. Next-day power for Wednesday at the ERCOT North hub, which includes the cities of Dallas and Fort Worth, spiked to a record of $8,800 per MWh, a nearly six-fold jump from $1,490 on Tuesday.
Analysts at Citigroup wrote:
“A production rebound could potentially take more than a week or two for the majority of oil and gas wells, but it might take longer for production from nearly all wells to recover.”
The Houston Ship Channel, which had opened for some vessel traffic during Tuesday, was shut again overnight. The 53-mile (85 km) waterway crucial to oil and fuel exports, has been closed since Feb. 14.
Reuters estimates that nearly 4 million barrels per day of refining capacity has been knocked out, which could drive up prices at the pump across the nation.