Crude oil futures saw a boost on Friday morning as markets anticipated higher demand for heating oil, driven by a cold snap sweeping through the US and Europe. The uptick in demand for heating oil is expected to increase the overall demand for crude oil.
At 9:58 a.m. on Friday, March Brent crude futures rose to $77.20, up by 0.36%, while February West Texas Intermediate (WTI) crude futures increased to $74.17, up by 0.34%. In India, January crude oil futures traded at ₹6375 on the Multi Commodity Exchange (MCX), slightly up from ₹6372 at the previous close, marking a 0.05% increase. February crude oil futures also saw a small rise, trading at ₹6343 compared to the prior close of ₹6338, up by 0.08%.
The cold weather across several regions in the Northern Hemisphere is driving increased demand for heating oil, which in turn is pushing up crude oil demand. This shift in weather patterns is fostering optimism in the market, with analysts projecting that it will continue to provide support to oil prices.
In a report released Friday, Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, noted that oil prices remain well-supported, with ICE Brent closing 1% higher on Thursday. “Sentiment is positive due to the cold weather across parts of the Northern Hemisphere, which is likely to boost oil demand,” they stated. Furthermore, the price of spot Asian liquefied natural gas (LNG) is trading at a premium over oil, adding to concerns of potential substitution.
However, the cold weather also brings concerns over travel disruptions in the northern hemisphere, with market reports highlighting potential impacts on transportation.
On the geopolitical front, ING Think’s report pointed out that uncertainty surrounding the US’s stance on Iran’s oil policies could offer additional support for crude prices. With sanctions continuing to restrict oil flows from Russia and Iran, Asian buyers are already seeking alternative oil grades from West Asia, further tightening the market.
In Europe, refined product inventories in the ARA (Amsterdam, Rotterdam, Antwerp) region rose by 50,000 tonnes to 6.77 million tonnes week-on-week. The increase was primarily driven by a 120,000-tonne rise in gasoline stocks. Other refined products, however, saw declines, with gasoil stocks falling by 35,000 tonnes. Despite this, gasoil inventories remain at comfortable levels for this time of year, with a total of 2.47 million tonnes.
Meanwhile, in the natural gas market, January natural gas futures on MCX were trading at ₹320.90, down by 1.56% from the previous close of ₹326. On the National Commodities and Derivatives Exchange (NCDEX), January dhaniya futures were trading at ₹7722, down by 0.28% from ₹7744 at the previous close. Additionally, April turmeric futures (farmer polished) on NCDEX were trading at ₹15140, marking a 0.39% decrease from ₹15200 at the prior close.
As the week progresses, the market’s attention remains firmly on the weather-driven demand for heating oil and the broader geopolitical dynamics that continue to shape crude oil prices.
Related topic:
What Is The Symbol For WTI Crude Oil Futures?
