Oil rose for a third session as an ongoing energy crisis in the U.S. pummeled domestic crude output.

Futures edged up in New York after flipping between gains and losses earlier on Wednesday. The deep freeze causing historic power outages across the central U.S. has led oil output in the country to plunge by a third. However, a spate of refinery outages from the cold temperatures are curbing demand for crude.

“There’s a push-pull there, as production’s knocked off, but the refiners are down too,” said John Kilduff, a partner at Again Capital LLC. “But it’ll be like a hurricane, in that it’ll pass.”

Crude’s rally faded briefly during Wednesday’s session after Dow Jones reported that Saudi Arabia plans to boost oil output in the coming months, citing unnamed advisers to the kingdom. While Saudi Arabia’s unilateral supply cuts this year came as a surprise to the market when initially announced, many investors had expected the producer to raise output come April. Meanwhile, Saudi Arabia is urging fellow members of the OPEC+ alliance to remain cautious as they prepare to consider further supply increases.

“We’re at a very delicate point here,” said Bob Yawger, head of the futures division at Mizuho Securities. OPEC+ has “to make sure the associated demand is there before increasing the barrels and not kill the golden goose here, which is what they’ll do if they add everything at once.”

Prices

• West Texas Intermediate for March delivery rose 17 cents to US$60.22 a barrel at 12:11 p.m. in New York
• Brent for April settlement gained 32 cents to US$63.67 a barrel

Temperatures in Texas are now low enough to freeze oil and gas liquids at the well head and in pipelines laid on the ground. Before the crisis, the U.S. was pumping about 11 million barrels a day, according to government data. Production in the Permian Basin alone -- America’s biggest oil field -- has plummeted by as much as 65 per cent.

A slew of crude pipelines were also shut earlier this week due to the freeze, including those that transport oil from the nation’s largest storage hub at Cushing, Oklahoma to the U.S. Gulf Coast, according to data-provider Genscape Inc. Multiple pipelines remained offline as of Tuesday.

While WTI’s nearest timespread flipped back into contango this week amid refinery closures and infrastructure issues associated with the freeze in the U.S., the similar spread for Brent has moved into an even more bullish backwardation structure.

In Russia, meanwhile, freezing temperatures are also contributing to production curtailments. The expected increase in the nation’s February oil output has so far not materialized, as some fields curb pipeline flows due to the abnormally cold weather.