WTI rises to near $74.00 due to increased likelihood of higher heating fuel demand

• WTI price appreciates on expectations of increased heating fuel demand driven by prolonged cold weather across the Northern Hemisphere.
• JP Morgan attributes the increase in Oil prices to growing concerns over supply disruptions driven by multiple factors.
• Oil prices rise amid rising concerns over supply disruptions, driven by Biden’s plan to announce sanctions targeting Russia's Oil revenues.

West Texas Intermediate (WTI) Oil price extends gains for the second successive session, trading around $73.90 per barrel during the European hours on Friday. Crude Oil prices are bolstered by expectations of higher heating fuel demand due to extended cold weather across the Northern Hemisphere.

The United States (US) Weather Bureau predicts below-average temperatures in central and eastern regions of the country. Similarly, much of Europe has been gripped by severe cold and is likely to face an unusually chilly start to the year.

According to Reuters, analysts at JP Morgan credit the Oil prices increase to mounting concerns over supply disruptions caused by tighter sanctions, combined with low oil inventories and freezing conditions across parts of the US and Europe.

Oil prices also climb due to heightened concerns over supply disruptions fueled by ongoing geopolitical tensions. US President Joe Biden is expected to announce new sanctions this week targeting Russia's Oil revenues, aiming to strengthen Ukraine's resistance against Moscow ahead of President-elect Donald Trump taking office on January 20.

On Friday, ING analysts mentioned in a note "Uncertainty surrounding how aggressive Trump will be toward Iran is offering additional support to crude oil prices,". They also highlighted that Asian buyers are already seeking alternative grades from the Middle East, as broader sanctions on Russia and Iran complicate Oil trade flows.