WTI crude oil rose to $74.13 per barrel, extending its rally for a third week. Prices briefly touched a high of $74.35 in intraday trading, reflecting the impact of freezing temperatures in the United States and Europe, which have sharply increased heating fuel demand.
The U.S. Weather Bureau forecasts below-average temperatures for central and eastern regions, while Europe faces a colder-than-usual start to the year.
These weather patterns have increased crude prices as heating oil, kerosene, and LPG demand rises.
The premium of front-month Brent contracts over six-month contracts reached its widest since August, highlighting supply tightness amid rising demand.
Supply concerns could escalate further as President Joe Biden is expected to announce new sanctions targeting Russia’s oil industry, a move likely to disrupt supplies further ahead of President-elect Donald Trump’s inauguration on Jan. 20.
Picture: Crude oil climbs to 74.12, supported by bullish sentiment, as seen on the VT Markets app.
Looking at the chart above, we see crude recovering from an early session low of 72.83, closing at a comfortable 74.12.
The 15-minute chart shows moving averages (MA5, MA10, MA30) trending upward, reinforcing a positive bias. The MACD (12,26,9) remains in positive territory but exhibits a narrowing histogram, indicating that bullish momentum is moderating as the price consolidates near resistance at 74.35.
Despite the dollar holding a six-week rally, crude has demonstrated impressive resistance against the historically affecting greenback. However, traders are expected to remain cautious as they await further news on upcoming U.S. Sanctions and policy rollouts as President-elect Donald Trump takes office.
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