By Gina Lee
Investing.com – Oil was up on Friday morning in Asia, as supply concerns and frigid weather in the U.S. extended already sharp gains from the previous session.
Brent oil futures rose 0.63% to $91.56 by 9:18 PM ET (2:18 AM GMT) and WTI futures rose by 0.70% to $90.90.
"WTI crude surged over the $90 level after an Arctic blast made its way to Texas and disrupted some oil production in the Permian Basin," Edward Moya, senior market analyst at OANDA, told Reuters.
A massive winter storm continues across central and northeast United States since Thursday and knocked out power and caused schools to close in several states. It also threatens already fragile oil supplies.
Rising demand means that oil markets are more vulnerable to supply shortages, according to analysts.
"Even as thousands of flights are canceled, the energy market is fixated over production and not so much short-term demand shocks," said Moya.
Geopolitical tensions in Eastern Europe and the Middle East have also driven sharp gains for oil. So far, Brent futures are already up by 17% and WTI by 20% for the year.
The U.S. has signaled that Russia was planning to use a staged attack as a reason to invade Ukraine. But Russia's President Vladimir Putin has put the blame on NATO and the West for increased tensions, even as he moves thousands of troops near to Ukraine's border.
Nonetheless, some analysts predict the oil market to flip into surplus by the next quarter, which would ease the recent surge in prices over the medium term.
"We expect the sequential trend of quarterly global stock draws will flip to inventory builds as soon as 2Q’22, and sustain for the next 15 to18 months," analysts at Citi Research said in a note late on Thursday.
"Our view is for a tight crude oil market to shift to surplus outright and in terms of days of demand cover."