NEW YORK, Jan 27, 2026, 06:58 EST — Premarket
- Crude oil prices ticked up Tuesday morning amid freezing temperatures disrupting U.S. production and refinery operations
- Traders stayed wary as supply from Kazakhstan returned and OPEC+ prepared to review its policy
- Focus shifts to U.S. stockpile figures due Wednesday and the OPEC+ meeting scheduled for Feb. 1
Oil prices ticked up Tuesday as a winter storm disrupted U.S. crude output and refinery activity. Brent futures climbed 23 cents, or 0.35%, settling at $65.82 a barrel, while U.S. West Texas Intermediate (WTI) added 29 cents, or 0.48%, to $60.92 by 5:17 a.m. ET. Tamas Varga, an oil analyst at PVM brokerage, noted, “The cold weather in the U.S. will likely cause quite significant drawdowns in oil stocks.” Traders also watched for signs of supply returning from Kazakhstan. 1
The storm is hitting both ends of the U.S. petroleum chain simultaneously: production and refining. Over the weekend, U.S. output plunged by as much as 2 million barrels per day (bpd), with the Permian Basin taking the biggest hit, according to Energy Aspects. A source close to ConocoPhillips said their Permian crude output dropped 175,000 bpd by Sunday. ExxonMobil and others also reported weather-related setbacks, while some Gulf Coast refineries faced issues due to freezing temperatures. 2
The early gains come after Monday’s pullback, as investors took a breather following a steep rally. Brent fell 29 cents, or 0.4%, closing at $65.59 a barrel, while WTI dropped 44 cents, or 0.7%, to $60.63. Both had jumped over 2% in the previous session. 3
Headlines from outside the U.S. are clouding matters. Kazakhstan’s energy ministry says production will restart at its largest oilfield, but industry insiders report volumes remain low. The force majeure on CPC Blend exports, which frees sellers from delivery duties, is still active. “Tengizchevroil (TCO) confirms … the resumption of initial crude oil production,” a Chevron spokesperson said. 4
OPEC+ — the cartel plus allies like Russia — is under the microscope as prices hover in the mid-$60s, with traders keenly awaiting any sign of a supply policy shift. Sources told Reuters the group plans to maintain its current freeze on output hikes for March at the Feb. 1 meeting. The eight key players set to convene are Saudi Arabia, Russia, UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman. JPMorgan predicts Kazakhstan’s Tengiz oilfield will stay offline through January, cutting the country’s crude production to around 1.0–1.1 million bpd this month, down from the usual 1.8 million bpd. 5
Geopolitical tensions are back, injecting fresh risk premiums even as supply and demand pull in opposite directions. According to U.S. officials, an aircraft carrier along with escort warships has docked in the Middle East, boosting President Donald Trump’s military options—whether to protect U.S. forces or launch action against Iran. Last week, Trump claimed the U.S. had an “armada” en route to Iran. 6
Demand signals aren’t as clear-cut as the weather story, which partly explains why crude isn’t breaking out. China’s crude stockpiling suggests a surplus of 1.13 million bpd for 2025, based on official data calculations. In December, the implied surplus jumped to 2.67 million bpd, with imports hitting a record 13.18 million bpd. Saudi Aramco CEO Amin Nasser pushed back on fears of oversupply at Davos last week, calling “oil glut predictions seriously exaggerated.” 7
On the U.S. supply front, traders are closely watching how shale output might react if prices slip again. Jarand Rystad, CEO of Rystad Energy, warned that shale production could drop by up to 400,000 bpd in 2026 if oil falls to $40 a barrel. He told a conference that, in a downside scenario, shale would likely remain flat through 2026. A Reuters survey from December projects WTI to average $58.15 a barrel that year. 8
The very storm squeezing supply also throws demand and logistics into chaos, and past outages that initially seemed severe ended up fading quickly. If U.S. production and refining bounce back sooner than anticipated — and Kazakhstan’s exports get back on track — crude could lose some of its recent gains, particularly if China gets price-conscious and cuts back on purchases.
Traders are now turning to U.S. inventory figures, with the Energy Information Administration’s Weekly Petroleum Status Report scheduled for release on Jan. 28 after 10:30 a.m. ET. Looking further ahead, the OPEC+ meeting on Feb. 1 and how quickly U.S. oil production ramps up following recent storms will influence markets next week. 9
