• More than 4 million people were without power in Texas on Tuesday morning, according to poweroutage.us.
• Gas prices shot up amid higher demand.
• "It's unprecedented in terms of what we're seeing both on the demand side, and in terms of the supply side," said Helima Croft, global head of commodity strategy at RBC.

Energy prices jumped Tuesday as a deep freeze in the South boosted demand for fuel and hampered production.

More than 4 million people were without power across Texas on Tuesday morning, according to poweroutage.us, as the electric grid couldn't keep up with heightened demand, forcing utilities to implement rolling blackouts in some cases.

"The majority of heating needs are met via electrical baseboard or heat pumps in the southern region," said John Kilduff, founding partner at Again Capital. "The demand for electricity over the weekend rivaled peak summer heat-wave levels."

Henry Hub natural gas futures jumped 7.4% to trade at $3.127 per million British thermal units. Gasoline futures advanced nearly 5%.

"The storm that has crippled the Midwest and Northeast was much worse than expected," said Jeff Kilburg, CEO at KKM Financial. "Frigid temps and speculators caught short are dramatically moving futures prices higher."

The storm knocked out about 30 gigawatts of generation capacity, according to estimates from ClearView Energy Partners, just as consumers were driving up demand to heat their homes. Ultimately, there just wasn't enough supply, forcing power companies to turn to the open market to buy electricity.

"Weather is severe enough to curtail supply when demand is near all-time high levels," RBC analysts said in a note. "Certain regional natural gas spot prices have shot up 10- to 100-fold in a matter of days."

West Texas Intermediate crude futures, the U.S. oil benchmark, advanced 58 cents, or 0.98%, to settle at $60.05 per barrel. The move comes after WTI broke above $60 on Monday for the first time in more than a year. Brent crude, the international oil benchmark, settled 5 cents higher at $63.35 per barrel.

Generating units across fuel types have been forced offline — including some wind production — and pipeline freezes are impeding the flow of natural gas and crude oil. Texas is the largest crude oil and natural gas producer in the U.S. and has 30 refineries, according to data from the U.S. Energy Information Administration.

Andy Lipow, president of Texas-based Lipow Oil Associates, said that of the 2.6 million people in Texas without power on Monday, only 70,000 were impacted by downed power lines or trees. He estimates that a million barrels per day of crude oil production has been taken offline, roughly 40% to 50% of natural gas production in the Permian Basin has been shut in, and about 50% of wind power production is down thanks to frozen blades.

The energy sector gained more than 3% during early trading on Tuesday. Marathon Oil spiked 9%, while Occidental Petroleum and Apache were up more than 5%. Exxon, Devon Energy and ConocoPhillips were all up more than 3%.

On Sunday, President Joe Biden declared a state of emergency in Texas as the storm brought snow and ice from Arkansas to Indiana. The storm is forecast to move from the Ohio Valley through Pennsylvania and into Maine, according to the National Weather Service.

"It's unprecedented in terms of what we're seeing both on the demand side, and in terms of the supply side," said Helima Croft, global head of commodity strategy at RBC.