Oil prices climbed over 1% on Thursday, with Brent settling at $76.92 (+$0.76, +1%) and WTI at $73.92 (+$0.60, +0.82%), driven by heightened winter fuel demand amid cold weather in the U.S. and Europe. Analysts noted that for every degree Fahrenheit below the 10-year average, heating oil and propane consumption increases by 113,000 barrels per day.
Tightening supply concerns were reflected in Brent’s futures market, where near-term contracts traded at a premium to longer-term ones. Ultra-low sulfur diesel prices also rose to their highest level since October due to increased heating needs.
Freezing temperatures and the possibility of new U.S. sanctions targeting Russia’s oil industry added upward pressure to prices. WTI is expected to fluctuate between $67.55 and $77.95 as markets anticipate clarity on President-elect Donald Trump’s policies and China’s economic stimulus efforts.