The Day at a Glance | February 16 2021

The Top

· Winter storm in Texas takes oil above $60 dpb after creating disruptions in production.

· China considers restricting rare earth mineral exports; this could affect the military industry and US defense.

· Economic indicators: Employment increases 0.3% in Europe during the 4Q20.

Economic environment

West Texas Intermediate (WTI) prices increased to their highest level in 13 months, boosted by a wave of cold weather that affected Texas. The WTI reached 60 dollars per barrel amidst disruptions in production of crude oil in Texas, the greatest producer in the United States. The weather put a halt on operations in oil wells and refineries, other than creating issues in the distribution of natural gas and the functioning of pipelines. More than a million people in the region have been left without electricity and the price of natural gas has soared. Oil, on its part, continued to reinforce its upwards trend seen in prior months, under expectations of a normalizing demand with global vaccination programs underway, decreasing crude oil inventories, and OPEC+ maintaining discipline regarding its production cutting programs and conflicts in the Middle East (Yemen); and now, disruption in supply in Texas has been added to the list. The rise in energy prices has been the main component driving inflationary pressures at a global level at the start of 2021, even though this isn’t expected to be long lasting. In Mexico, the disruption in the supply of natural gas will affect industries in the northern part of the country, while more than 4 million people in Sonora, Nuevo Leon, Coahuila, Chihuaha and Tamaulipas were left without electricity.

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