Oil Prices Climb as U.S. Cold Snap, Dollar Weakness Tighten Supply Outlook

Oil prices moved higher during Asian trading on Wednesday, extending gains from the previous session as extreme winter weather disrupted crude production across the United States, raising concerns about tighter global oil supplies. The rally was further supported by a weaker U.S. dollar and ongoing geopolitical tensions in the Middle East, both of which continued to influence crude market sentiment.

Brent crude futures for March delivery edged up 0.1% to trade at $67.66 per barrel, hovering near a four-month high. Meanwhile, West Texas Intermediate (WTI) crude futures rose 0.2% to $62.53 per barrel by early Asian hours. The steady climb in oil prices reflects growing expectations of near-term supply constraints, particularly in the world’s largest oil producer and consumer.

A powerful winter storm sweeping across large parts of the United States has significantly disrupted oil output, especially in key producing regions. Subzero temperatures and heavy snowfall forced several producers to halt operations, while exports from the U.S. Gulf Coast reportedly dropped to zero as freezing conditions paralyzed logistics. According to estimates, nearly 2 million barrels per day of crude production were affected over the weekend, amplifying concerns about shrinking supply levels.

Market participants are increasingly positioning for sharp drawdowns in U.S. crude inventories in the coming weeks. This outlook was reinforced by the latest data from the American Petroleum Institute, which showed U.S. oil inventories unexpectedly declined by around 0.25 million barrels last week, defying forecasts that had pointed to a sizable build. Traders often view API data as a leading indicator for official inventory figures, which were scheduled for release later in the day.

Adding further support to oil prices, the U.S. dollar slid to a near four-year low amid investor unease over economic uncertainty, shifting trade policies, and geopolitical risks under President Donald Trump. A weaker dollar typically boosts commodity prices by making dollar-denominated assets more attractive to global buyers. Attention also remained focused on the Federal Reserve’s policy decision, with markets closely watching signals from Chair Jerome Powell on the future path of interest rates, which could further influence energy markets.