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Oil extended its rally toward $62 a barrel as a worsening U.S. energy crisis took out almost 40% of the nation’s crude production.

Futures in New York climbed as much as 1% after closing at a 13-month high on Wednesday. More than 4 million barrels a day of output is now offline, according to traders and executives, amid an unprecedented cold snap that’s frozen well operations and led to widespread power cuts. However, a spate of refinery outages has curbed demand for crude in the U.S., while gasoline consumption is also down as the cold keeps more Americans off the road.

See also: Big Freeze in Texas Is Becoming a Global Oil Market Crisis

The supply shock is aiding an already frothy global oil market and is starting to impact global energy flows, with traders snapping up ocean-going tankers to haul millions of barrels of European diesel to the U.S. Adding to the bullishness, the American Petroleum Institute reported an almost 6 million-barrel drop in U.S. crude stockpiles before official data due later on Thursday.

Crude has surged 27% this year as Saudi Arabia’s deep output cuts and an improving demand outlook encouraged investors. The rally was tempered somewhat on Wednesday following a Dow Jones report citing unnamed advisers that the kingdom is planning to boost production in the coming months. Many investors do expect that the Saudis will pump more from April.

Saudi Arabia’s energy minister, meanwhile, urged fellow members of the OPEC+ oil alliance to remain cautious as they prepare to consider further output increases. The group will gather in early March to decide whether they can revive some more of the production halted during the coronavirus crisis.


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