(Bloomberg) — Freezing temperatures sweeping the US shut in more than half of North Dakota’s oil production and curbed refinery operations in Texas.
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The outage in the second-largest US shale basin briefly lifted West Texas Intermediate futures. Physical oil prices also rose on the Gulf Coast as Midwest refiners seek alternatives to North Dakota’s Bakken oil.
As much as 650,000 barrels a day is offline, up from 425,000 barrels on Monday, according to Justin Kringstad, director of the North Dakota Pipeline Authority. The state’s total output reached 1.2 million barrels a day in October.
Freezing temperatures also hobbled refiners in Texas, the country’s oil processing hub. Exxon Mobil’s Baytown refinery was forced to reduce rates at two units, while Flint Hills cut operations at a unit in Corpus Christi.
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Spot diesel trading in Houston firmed to its narrowest discount to Nymex futures in more than two months, while gasoline fetched 9 cents a gallon below futures, its strongest relative value in about three months.
–With assistance from Julia Fanzeres, Joe Aboussleman and Lucia Kassai.
(Updates with price reaction and refinery outages in second, fifth and sixth paragraphs)
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