Oil prices rose strongly on Friday, and are preparing to record a third consecutive week of gains driven by supply concerns and increased demand from icy weather across the U.S. and Europe.
Over the past three weeks, Brent and WTI have surged 7,6% and 8,6%, respectively.
Key drivers include heightened fuel demand due to colder-than-average temperatures in central and eastern U.S. regions and extreme cold in Europe. Analysts from JPMorgan project a year-over-year increase of 1.6 million barrels per day in global oil demand for Q1 2025, driven by heating oil, kerosene, and LPG consumption.
Market attention is also on potential supply disruptions due to sanctions on Iran and Russia. With President-elect Donald Trump preparing to take office on Jan. 20, concerns are growing over tighter restrictions on Iran and potential trade tariffs that could inflate prices further.
Additional support for prices comes from tightening U.S. oil inventories. Crude stockpiles at Cushing, Oklahoma, are at their lowest since 2014.
Despite the strong U.S. dollar, which typically pressures oil prices, market sentiment has remained bullish. Factors such as falling inventories, reduced Russian shipments, and a possible clampdown on Iranian oil exports have overshadowed concerns about weaker Chinese demand. Yesterday's data showed that consumer inflation in China fell further towards zero, highlighting the challenge authorities face in bolstering the economy.