Natural gas futures were leading a surge in energy prices across the board on Tuesday, as large swaths of the U.S. struggled with subzero temperatures and rolling blackouts hit several states.

March natural gas futures

climbed 5.5% to $3.073 per million British thermal units, while March gasoline

climbed 5.3% to $1.7813 a gallon. And March heating oil

was up nearly 3% to $1.8235 a gallon.

The surge in prices came as the Southwest Power Pool, a group of utilities covering 14 states, ordered utilities to start rolling blackouts to cope with an exhausted supply of reserve energy. That is as a winter storm swept from the Ohio Valley to the Gulf Coast of the U.S., bringing freezing temperatures as far south as San Antonio, Texas.

Extreme winter weather was forcing wind power generators in Texas offline and causing spikes in electricity prices. The Electric Reliability Council of Texas estimated two million people were without power on Monday evening, The Wall Street Journal reported. President Joe Biden declared a state of emergency in Texas, at the request of Gov. Greg Abbott, paving the way for emergency aid to reach the state. The storm has killed two people so far in Texas.

The rare storm hitting Texas was also raising concerns over oil supply disruptions amid reports of some refineries shutting down due to extreme cold.

The deep freeze also triggered a sharp gain in oil futures prices on Monday. Regular trading was shut due to the Presidents Day holiday.

March crude prices

climbed 61 cents, or 1% to $60.08 a barrel, after topping $60 a barrel for the first time since January 2020 on Monday. Brent crude prices

gained 27 cents to $63.47 a barrel, also marking a January 2020 high.

Read: Oil ends Friday’s session higher on Middle East tensions, with global prices up over 5% for the week

“But because the Texas boost in energy demand, and up to a million-barrel-drop in daily supply are temporary, levels above $60 look attractive to top-sellers,” cautioned Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients. “A downside correction could easily kick in and pull prices below the $55 per barrel, but should not damage the medium-term positive trend in oil prices.” 

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