Oil prices are recovering in the first days of 2025… and are eligible for a greater rise

Crude oil prices rose in the first days of 2025 after the United States unveiled a broader sanctions package targeting Russian tankers, which led to a change in the course of crude prices and bright prospects for it at the beginning of the new year, according to what Rebecca Babin, trader and primary monitor of stock markets at “Oula” company, said. CIBC Private Wealth” in New York for the Rigzone website.
“This raised concerns among Indian buyers who were the main buyers of Russian barrels,” Babin added, noting that the scope of the sanctions appears larger than initially expected.

Cold weather and high oil

Babin continued, “In addition, cold weather across the United States is boosting demand for heating fuels and may lead to a curtailment of exposure with temperatures falling to near freezing, and a break of the key resistance level at $75 in WTI is likely to stimulate… Systematic purchases by funds, which is fueling the rise in oil.”
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The reason for the rise in oil prices

For his part, Bill Farren Price, head of gas research at the Oxford Institute for Energy Studies, said about the reason for the rise in oil prices. He told Rigson that he believes it is “a combination of demand for diesel and winter fuel and the ongoing response to OPEC Plus’ decision in early December to extend cuts and fears of… Trump in his second term may mean imposing new sanctions on producers.”
Tamas Varga, an analyst at PVM Oil Associates, pointed to the reason for the rise in oil and said, “The cold weather in Europe and the United States raises expectations of increased withdrawals from energy stocks.”
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Impact of US sanctions

Varga added: “The current and planned sanctions on Russia and Iran force China to search for alternative sources of crude oil supplies. This helps Brent crude rise, supports West Texas Intermediate crude oil, and makes American crude oil exports uneconomic.”
Analysts at ODDO said they believe this is due to lower exports from Russia and Iran, with the surplus likely to be lower in 2025 than initially expected.

Oil prices in 2025

In a market analysis, Samer Hassan, chief market analyst at X.com, indicated that crude oil prices are on the right track to achieve a second consecutive day of gains.
Hassan confirmed in the analysis that Brent crude and West Texas Intermediate crude rose by more than 2% “and reached their highest levels since October of last year.”

Positive factors support oil

According to analyses, oil price gains come amid support from a group of positive factors, including weather forecasts and ongoing announcements of measures to support the Chinese economy, in addition to the potential increase in supply restrictions from Iran and Russia.
In a report issued by Stratas Advisors, the company revealed that “for the current week,” the company believes that oil prices “will receive a boost from continued support from factors last week as well as from the expected cold weather, which will increase demand for heating fuel and has the potential to influence… on production at source.

Dollar strength and oil prospects

The report added that “some downward pressure will come from the strength of the US dollar,” noting that “the US dollar index rose last week and ended the week at 108.92 points from the previous week at 108.13, which is at the highest level since October 2022 and up from 100.42 on September 22, 2024.”

Biden sanctions on Russian oil

The new sanctions imposed by the Biden administration target the two giant Russian oil companies, Gazpromneft and Surgutneftgaz, and their fleet of ships and opaque traders.
Oil prices rose, while European stocks fell as investors feared shrinking global supplies.
The sanctions, which focus on major oil companies Gazprom Neft and Surgutneftegaz, shadowy oil traders and 183 Shadow Fleet ships, aim to tighten the noose on Russian energy exports and restrict its ability to access global markets.
West Texas Intermediate crude prices rose by 3.5% to $77 a barrel, recording their strongest session in three months, while Brent crude rose by 2.9% to $79 in late European trading.