Oil rebounds on extreme U.S. weather

Oil prices rose over the Christmas break amid widespread concerns over winter storms across the U.S. affecting production and logistics of petroleum products and shale oil. Brent crude LCOc1 rose 73 cents, or 0.9%, to .65 a barrel, while U.S. West Texas Intermediate crude CLc1 rose 85 cents, or 1.1%, to .41 a barrel.

On Friday, Brent rose 3.6%, while West Texas Intermediate rose 2.7%,Both recorded their biggest weekly gains since October last year. Kazuhiko Saito, chief analyst at Fujimi Securities, said buying was sparked by fears of supply disruptions caused by winter storms in the U.S., which are expected to improve this week.That means the rally won't last long.

A deadly snowstorm hit Buffalo, New York, on Christmas Day, leaving drivers and rescue workers trapped in their vehicles and leaving thousands without power. The snowstorm has cooled much of the United States for days. Airlines had canceled nearly 2,700 flights as of Saturday as the severe weather disrupted airport operations across the country. Severe cold and high winds have knocked out power across the U.S., reducing energy production and driving up heating costs and electricity prices.

In addition, the market's concerns about the possible reduction of Russian crude oil production also pushed up international oil prices. RIA Novosti quoted Russian Deputy Prime Minister Alexander Novak as saying,In response to the price cap, Russia could cut oil production by 5% to 7% in early 2023.