Low temperatures increase heating use, while there is concern about a shortage of Brent crude.
The oil prices rose more than 1% on Thursday as cold weather hit parts of USA and Europe, driving winter fuel demand.
The futures of Brent rose 98 cents, or 1.29%, to $77.14 a barrel; while those of US crude oil West Texas Intermediate (WTI) They gained 84 cents, or 1.15%, to $74.16. Both benchmarks fell more than 1% on Wednesday, as a dollar stronger than expected increase in American fuel stockpiles pressured prices.
“The increase is definitely due to the winter fuel demand that is starting to be felt here in the United States,” he said John Kilduff, partner at Again Capital in New York.
The analysts of JPMorgan they hope that the oil demand by January to expand by 1.4 million barrels per day (bpd) year-on-year to 101.4 million bpd, driven mainly by greater use of heating fuels in the northern hemisphere. “Global oil demand is expected to remain strong throughout January, driven by colder-than-normal winter conditions that are boosting heating oil consumption, as well as an earlier start to tourism activities in China for the holidays Lunar New Year“said the analysts.
Meanwhile, the structure of the Brent futures market also indicates that traders are increasingly concerned about the supply shortage at the same time as demand increases.
On Wednesday, the premium of the one-month Brent contract over the six-month contract reached its highest level since August. An extension of this trend backwards, when futures for immediate delivery are higher than for later delivery, generally indicates that supply is decreasing or demand is increasing. However, official data from the Energy Information Administration (EIA) showed that gasoline and distillate reserves in the United States increased last week.
Looking ahead, WTI crude oil is expected to fluctuate within a range of $67.55 to $77.95 in February as the market awaits more clarity on U.S. policy. trump administration and new fiscal stimulus measures from China, said OANDA’s Wong.
Meanwhile, crude oil supply Saudi Arabia to China will decline in February from the previous month, trade sources said on Thursday, after the kingdom increased its official sales prices to Asia for the first time in three months.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
