January 10, 2025 (MLN): Oil prices rose in early Asian trade and were on track for a third straight week of gains with icy conditions in parts of the United States and Europe driving up fuel demand for heating.
Brent crude futures increased by $0.40, or 0.52%, to $77.32 per barrel.
West Texas Intermediate (WTI) crude futures fell by $0.40, or 0.54%, to $74.32 per barrel by [11:10 am] PST.
Analysts at JPMorgan attributed the gains to growing concerns over supply disruptions caused by tightening sanctions, Reuters reported.
These concerns were heightened by low oil stockpiles, freezing temperatures in many parts of the U.S. and Europe, and improving sentiment regarding China's stimulus measures.
The U.S. weather bureau expects central and eastern parts of the country to experience below-average temperatures.
Many regions in Europe have also been hit by extreme cold and will likely continue to experience a colder-than-usual start to the year, which JPMorgan analysts expect to boost demand.
“We anticipate a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025," JPMorgan said in a note on Friday.
"This increase is primarily boosted by demand for heating oil, kerosene, and LPG.”
Meanwhile, the premium of the front-month Brent contract over the six-month contract reached its widest since August this week, potentially indicating supply tightness at a time of rising demand.
Oil prices have rallied despite the U.S. dollar strengthening for six straight weeks.
A stronger dollar typically weighs on prices, as it makes purchases of crude expensive outside the United States.
Supplies could be further impacted as U.S. President Joe Biden is expected to announce new sanctions targeting Russia's economy this week.
The sanctions aim to bolster Ukraine's war effort against Moscow before President-elect Donald Trump takes office on Jan. 20.
A key target of sanctions so far has been Russia's oil industry.
Copyright Mettis Link News
Posted on: 2025-01-10T11:19:40+05:00
