Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up 33 cents, or 0.5%, at $63.24 a barrel by 0945 GMT, after gaining nearly 1% last week. U.S. oil rose 23 cents, or 0.4%, to $59.47 a barrel, having fallen 0.4% last week.

Prices also received a boost after investment bank Goldman Sachs raised its Brent price forecast by $10, with expectations for it to reach $70 by the second quarter and $75 in the third quarter.

“We now forecast that oil prices will rally sooner and higher, driven by lower expected inventories and higher marginal costs - at least in the short run – to restart upstream activity,” Goldman analysts wrote.

“Better than expected demand and still depressed supply once again creating a larger deficit than even we expected,” they said.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Oilfield crews will probably take several days to de-ice valves, restart systems and begin oil and gas output. U.S. Gulf Coast refiners are assessing damage and may take up to three weeks to restore most of their operations, analysts said, though hampered by low water pressure, gas and power losses.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

“Longer term, the fall in capital expenditure at U.S. shale oil companies this year will keep drilling activity subdued, leading to output remaining below pre-pandemic levels.”

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.