January 10, 2025
Tight supply from the Organization of Petroleum Exporting countries and allies, OPEC+, coupled with expectations of higher global demand from cold weather and a drop in US heating oil inventories, have triggered oil prices in the global commodities market.
According to report monitored on Marketforces Africa, the international benchmark Brent crude rose by 0.4% to $77.24 per barrel. The US benchmark West Texas Intermediate (WTI) increased by 0.4% to $73.95 per barrel, compared to its prior session close of $73.67. Oil prices climbed on Friday, due to factors like market players’ anticipations that there will be an increase in oil demand due to the impact of cold weather.
US Energy Information Administration (EIA) data, backed facts that heating oil stockpiles declined by 632,000 barrels for the week ending January 3. US heating oil futures rose above $2.38 per gallon in January, driven by a decline in US crude inventories for the seventh consecutive week and seaborne exports from Russia dropped since August 2023, to their lowest levels.
In response to severe weather challenges that disrupted the supply of heating and transportation fuels, a state of energy emergency was declared in Wisconsin, US, thereby further supporting higher prices.
Experts, warned that the cold weather could adversely affect oil production and refinery operations in the US.
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Governor Tony Evers, announced that he signed the executive order ‘due to persistent challenges caused by severe regional winter weather and its impact on the distribution of residential heating fuel, including heating oil and propane.’
However, analysts expect global oil demand to remain strong throughout January as colder weather boosts fuel consumption and travel activity increases ahead of the Chinese New Year holiday, a 15-day festival from January 21 to February 20.
There are indications that oil supply from Russia and OPEC members that were weak in December would continued to raise concerns of tightening global supply, driving price surge.
