Oil prices rose by 1% as tightening supplies from Russia and OPEC coincided with stronger U.S. economic data, fueling optimism for higher demand.
Brent crude climbed to $77.80 a barrel, while WTI increased to $75.20. U.S. crude crossed $75 for the first time in nearly three months, boosted by a seventh consecutive weekly inventory draw. The American Petroleum Institute reported a 4 million-barrel decline in U.S. stockpiles.
Oil output from OPEC fell in December, driven by UAE maintenance, while Russia’s production dropped below target level. Simultaneously, robust U.S. job data signaled expanding economic activity, reinforcing demand expectations.
Despite short-term gains, analysts warn of oversupply in 2025. BMI, a division of Fitch Group, forecasts Brent to average $76 a barrel, citing non-OPEC production growth outpacing demand by 485,000 bpd.
Cold weather in the U.S. and Europe has also bolstered crude prices, raising demand for heating fuels. Traders, however, remain cautious over potential oversupply and geopolitical risks as the Trump administration eyes stricter sanctions on Iran and potential trade tariffs on China.