The recent cold wave in the United States has driven up heating demand, pushing New York oil prices to their highest level in three months.
On Tuesday, West Texas Intermediate (WTI) crude futures for February delivery settled at $74.25 per barrel on the New York Mercantile Exchange, up $0.69 or 0.94% from the previous session. This is the highest level since October 11, last year. Compared to the beginning of the year, the WTI prices have increased by 3.53%.
Concurrently, Brent crude futures for March delivery, the global oil price index, rose $0.75 or 0.98% to close at $77.05, up from $76.30 the previous day. Oil prices have been steadily rising recently, and WTI has shown a trend of increasing prices for six of the last seven trading days.
Anticipation of economic stimulus measures in China has been a key factor in the rise in oil prices since the end of last year. Investors’ buying sentiment is rising as China, the world’s largest crude importer, is expected to implement a large-scale stimulus policy this year.
Analysts point to the cold wave across the United States as the primary factor for the recent oil price surge. The extreme cold has increased the demand for heating fuels and heightened the risk of production freezes in oil-producing regions. While it’s uncertain whether this situation will continue, crude prices will rise further if the cold wave continues.
Tamas Varga, an analyst at PVM Oil Associates, noted that crude oil prices may remain strong if the cold temperatures persist. However, he cautioned that maintaining a long-term upward trend would be challenging without fundamental changes in the global oil market.
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