Oil prices rise as cold weather in US, Europe fuels demand hopes
2025.01.09 21:12
Investing.com– Oil prices rose in Asian trade on Friday, recouping a bulk of their losses this week as cold weather in the U.S. and Europe pushed up hopes that demand for heating fuels will increase.
Markets were also watching for any more signs of Chinese stimulus, after inflation data from the country largely underwhelmed for December. Beijing is expected to ramp up fiscal spending in 2025 to fish the Chinese economy out of an extended downturn.
expiring in March rose 0.4% to $77.22 a barrel, while West Texas Intermediate crude futures rose 0.4% to $75.53 a barrel by 20:21 ET (01:21 GMT).
Cold weather sweeps across US, Europe
An ongoing polar vortex caused cold weather in several regions of the U.S. and Europe, with snowstorms sweeping across the central U.S.
This pushed up bets that demand for heating fuels in the regions will increase and factor into higher crude demand.
But cold weather is also expected to disrupt travel in the northern hemisphere. Recent data showed a series of strong builds in U.S. oil product inventories, signaling that demand in the world’s biggest fuel consumer remained languid.
Markets were also watching for more signals on stimulus in China, as recent inflation data showed little improvement in the economy. The Lunar New Year holiday in February is also expected to help spur increased travel demand in the country.
Strong dollar limits oil upside
But strength in oil prices was limited by a strong dollar, with Brent and WTI futures headed for a muted weekly performance.
The rose sharply this week, coming back in sight of an over two-year peak as hawkish signals from the Federal Reserve saw traders brace for a slower pace of interest rate cuts in 2025.
Focus is now squarely on data for December, due later on Friday, for more cues on rates.
Fed policymakers were also seen expressing some caution over protectionist and expansionary policies under President-elect Donald Trump, which could underpin inflation in the long term.
A strong dollar pressures crude demand by making oil more expensive for international buyers.
