Oil prices set for weekly gains amid cold weather and supply concerns
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Summary
Oil prices edge higher as colder weather across the U.S. and Europe boosts heating fuel demand. Brent crude and WTI rise 1.2% to $77.81 and $74.78 a barrel, respectively, with additional support from potential geopolitical disruptions. Analysts forecast modest gains for Q1, citing tighter supply conditions and weather-driven demand.
Colder temperatures drive heating fuel demand
Weather impact on demand
Colder weather across key regions, including the U.S. and Europe, has significantly increased expectations for stronger demand for heating fuels.
This seasonal boost in consumption has provided a supportive backdrop for crude prices, offsetting some concerns about slowing global economic growth.
Geopolitical factors add to supply worries
Sanctions and alternative sourcing
Uncertainties surrounding U.S. energy policies, including potential new tariffs and stricter sanctions on Russia and Iran, are adding pressure to supply chains.
Asian buyers are reportedly shifting focus to Middle Eastern grades, which are becoming increasingly difficult to source due to the tightened flow of Russian and Iranian oil.
Analyst insights
ING analysts note that ongoing geopolitical tensions could exacerbate supply constraints, leading to price volatility in global energy markets.
Q1 price estimates revised upward
Citi’s forecast update
Citi analysts raised their Q1 estimates for Brent crude to $71 a barrel and WTI to $67 a barrel.
This adjustment reflects expectations for continued colder temperatures and potential disruptions to exports from Iran and Russia.
Technical outlook for oil markets
Brent crude
Resistance: $78.50 – December highs.
Support: $76.00 – Weekly lows, marking a key threshold for sustaining gains.
WTI crude
Resistance: $75.50 – Immediate resistance level.
Support: $73.50 – Support aligning with recent consolidation zones.
Conclusion
Oil prices are on track for weekly gains as colder weather and geopolitical uncertainties underpin demand and tighten supply outlooks. Investors will remain focused on heating fuel consumption trends and potential disruptions in oil flows from key producers. Analysts expect further price resilience in Q1, supported by a mix of seasonal demand and geopolitical risk factors.
Oil prices edge higher as colder weather across the U.S. and Europe boosts heating fuel demand. Brent crude and WTI rise 1.2% to $77.81 and $74.78 a barrel, respectively, with additional support from potential geopolitical disruptions. Analysts forecast modest gains for Q1, citing tighter supply conditions and weather-driven demand.
Colder temperatures drive heating fuel demand
Weather impact on demand
Colder weather across key regions, including the U.S. and Europe, has significantly increased expectations for stronger demand for heating fuels.
This seasonal boost in consumption has provided a supportive backdrop for crude prices, offsetting some concerns about slowing global economic growth.
Geopolitical factors add to supply worries
Sanctions and alternative sourcing
Uncertainties surrounding U.S. energy policies, including potential new tariffs and stricter sanctions on Russia and Iran, are adding pressure to supply chains.
Asian buyers are reportedly shifting focus to Middle Eastern grades, which are becoming increasingly difficult to source due to the tightened flow of Russian and Iranian oil.
Analyst insights
ING analysts note that ongoing geopolitical tensions could exacerbate supply constraints, leading to price volatility in global energy markets.
Q1 price estimates revised upward
Citi’s forecast update
Citi analysts raised their Q1 estimates for Brent crude to $71 a barrel and WTI to $67 a barrel.
This adjustment reflects expectations for continued colder temperatures and potential disruptions to exports from Iran and Russia.
Technical outlook for oil markets
Brent crude
Resistance: $78.50 – December highs.
Support: $76.00 – Weekly lows, marking a key threshold for sustaining gains.
WTI crude
Resistance: $75.50 – Immediate resistance level.
Support: $73.50 – Support aligning with recent consolidation zones.
Conclusion
Oil prices are on track for weekly gains as colder weather and geopolitical uncertainties underpin demand and tighten supply outlooks. Investors will remain focused on heating fuel consumption trends and potential disruptions in oil flows from key producers. Analysts expect further price resilience in Q1, supported by a mix of seasonal demand and geopolitical risk factors.