After breaking 13-month high records, oil prices lost most of their gains during the week ending Feb. 19 over fears of weather-related demand declines in Texas.
International benchmark Brent crude traded at $62.95 at 1211 GMT on Friday, posting a 0.56% decrease from Monday when trade at 0718 GMT registered at $63.31 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $59.33 at the same time on Friday, decreasing 0.66% relative to $59.73 a barrel on Monday.
Oil markets started the week with gains, from potential supply disruptions from rising tensions in the Middle East after the Saudi-led coalition in Yemen said Saturday it had intercepted a drone fired by Houthi rebels towards the Abha airport in southwestern Saudi Arabia.
The freezing temperatures, which badly hit the US’s largest oil-producing state of Texas, brought almost 65% of the region’s production to a halt and lent more support to the bullish oil prices.
However, after a few days of record-high price levels driven by the decreasing supply in the area, investor concerns intensified over refinery shutdowns, bringing the weak demand problem to the fore and causing a 4% drop in oil prices from earlier gains.
Electric power and water service slowly resumed at oil production fields and refineries, however, experts say the maintenance period to fix the mechanical damage caused by extremely cold weather could be lengthy.
Among the various production loss estimates, several experts say that over 4 million barrels per day of oil output was cut, while some traders, including Citigroup Inc., concur that the total production loss may reach 16 million barrels through early March. Others, however, estimate that the current production losses could be double this.
The global energy consultancy firm, Wood Mackenzie, forecasts that as temperatures are expected to climb over the next week across the US, most production in the area will be fully restored.
However, the energy consultancy stressed that full resumption of production at the large, highly-complex refineries in the region will take several weeks.
Oil price declines came despite a sharp drop in US crude inventories.
US crude oil inventories declined last week, signaling an uptick in crude demand in the US, the world's largest oil consumer.
US commercial crude oil inventories fell by 7.3 million barrels, or 1.5%, to 461.8 million barrels, relative to the market expectation of a build of 2.2 million barrels, according to data released by the EIA on Thursday.
By Sibel Morrow