London, Jan 27, 2026, 11:59 (GMT) — Regular session
- By 10:17 GMT, Brent crude rose 23 cents to $65.82 a barrel; WTI climbed 29 cents, reaching $60.92
- A U.S. freeze cut crude output by as much as 2 million bpd, with several Gulf Coast refineries facing disruptions
- Traders are eyeing U.S. inventory figures set for Jan. 28 and the upcoming OPEC+ discussions on Feb. 1
Brent crude futures edged higher Tuesday after a U.S. winter storm disrupted crude production and unsettled some Gulf Coast refineries, though potential supply from Kazakhstan capped the rally. “The cold weather in the U.S. will likely cause quite significant drawdowns in oil stocks over the next few weeks,” said Tamas Varga, oil analyst at PVM. Meanwhile, ANZ’s Daniel Hynes noted that “supply risks haven’t totally evaporated.” By 1017 GMT, Brent had gained 23 cents, or 0.35%, to $65.82 a barrel, while U.S. West Texas Intermediate added 29 cents to $60.92. 1
The move up is significant because it redirects attention to near-term barrels rather than projections for later this year. When U.S. production and refining both drop simultaneously, the market can tighten in unexpected areas—and fast.
It also reveals just how shaky conviction is on the market’s direction. Traders have pinned hopes on an “ample supply” narrative for 2026, but the freeze throws inventories back into the spotlight, forcing fresh questions about what comes first.
The storm slashed U.S. crude output by up to 2 million barrels per day (bpd), roughly 15% of the nation’s total production, Reuters reported. The Permian Basin took the brunt of the disruption, hitting major producers like ConocoPhillips, Chevron, ExxonMobil, and Occidental. Officials expect shut-ins to ease soon, with full production recovery forecasted by Jan. 30. 2
Brent slipped 29 cents to $65.59 on Monday, after jumping more than 2% on Friday. Investors balanced storm-related outages against the chances of supply bouncing back. Energy Aspects pegged outages peaking Saturday, with the Permian Basin losing about 1.5 million bpd before easing. Kazakhstan readied to restart output at its largest field, while the Caspian Pipeline Consortium (CPC) reported its Black Sea terminal had resumed full loading. “Crude remains in a holding type trade pattern until more is known about how the Trump Administration will handle Iran,” said Dennis Kissler, senior vice president of trading at BOK Financial. 3
The Iran factor continues to cast a shadow over the tape. Headlines from the Middle East often push the risk premium higher, even if the fundamentals seem steady.
Traders are also eyeing how much demand will come from China. Reuters calculations reveal China took on a significant chunk of last year’s crude surplus, though its purchases have been price-sensitive — ramping up when crude is cheap, pulling back as prices rise. 4
Looking ahead, supply remains the key constraint. Jarand Rystad, CEO of Rystad Energy, warned that U.S. shale output might drop by as much as 400,000 bpd in 2026 if prices fall to $40 a barrel. On the other hand, production could hold steady near current levels around $60 if OPEC maintains its current cuts. 5
The trade can quickly flip the other way. Should U.S. production and refinery output bounce back faster than anticipated—and Kazakhstan’s supply climbs smoothly—the market could swing back to the “too much oil” narrative that’s haunted this year’s rally.
Traders are keeping a close eye on the curve. If the front-month contract—the closest delivery—carries a bigger premium than later months, it signals a tight market right now. But if the curve flattens out, it hints the storm could be just market noise rather than a real shortage.
On Wednesday at 10:30 a.m. Eastern, the market will focus on the U.S. government’s weekly petroleum status report, looking for evidence that outages are impacting crude and product stockpiles. 6
OPEC+ — the oil cartel plus allies like Russia — is set to meet Feb. 1, with most delegates anticipating a hold on output hikes for March. Oil prices have jumped over 8% this month, briefly topping $66 a barrel, according to sources. 7
