By Anadolu Agency
January 18, 2024 5:25 amANKARA
Oil prices climbed due to several bullish factors, including the likelihood of US production disruptions from extreme cold, a depreciating US dollar, OPEC’s elevated demand projections, and escalating tensions in the Middle East.
The international benchmark crude Brent traded at $78.35 per barrel at 0734 GMT, a 0.60% increase from the closing price of $77.88 a barrel in the previous trading session on Wednesday.
The American benchmark, West Texas Intermediate (WTI), traded at the same time at $73.13 per barrel, down 0.89% from Wednesday’s close of $72.48 per barrel.
Both benchmarks recorded marginal increases after OPEC predicted higher oil demand in 2025.
OPEC’s monthly oil market report released on Wednesday showed that oil demand in 2025 would rise by 1.8 million barrels per day (bpd) year-over-year. However, the report cautioned about uncertainties, including global economic trends, which could influence these forecasts.
The surge in prices is also partly attributed to investor concerns about the impact of the intense cold weather in the US on oil production and refining facilities.
States including Iowa, Missouri, and Texas are experiencing severe cold and snowstorms, with temperatures dropping below zero.
The National Weather Service (NWS) described these as “all-time lows,” forecasting that the cold spell would extend to 26 states across the central and northeastern US in the upcoming days.
A weaker US dollar also put prices under pressure, with the greenback falling 0.18% to 103.01 on Thursday. If the dollar depreciates against other currencies, dollar-indexed crude oil becomes cheaper for holders of other currencies and exerts upward pressure on prices.
Meanwhile, data revealing bearish demand in the US limited gains.
The American Petroleum Institute (API) late Wednesday announced an estimated increase of nearly 483,000 barrels in US crude oil inventories, against the market expectation of a fall of 2.4 million barrels.
If the US Energy Information Administration (EIA) confirms the stock build when it releases actual data on oil stocks later on Thursday, prices could fall.
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