Oil prices surged Friday, on track for a third straight week of gains, fueled by concerns over potential supply disruptions from looming sanctions on Russia.
Brent crude jumped more than 3% to breach $80 a barrel, hitting its highest level in over three months. U.S. West Texas Intermediate also rallied strongly, topping $78 a barrel.
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Open real account TRY DEMO Download mobile app Download mobile appThe gains come amid reports of imminent, sweeping U.S. sanctions targeting Russia’s oil sector. The measures are expected to encompass approximately 180 oil tankers, a dozen oil trading firms, two major oil companies, and key Russian oil executives. Specifically, the U.S. is reportedly targeting two significant oil market players: Gazprom Neft and Surgutneftgas. This information stems from a document circulating among oil traders. The sanctions are anticipated to be announced as soon as today, though official comment is pending.
The Biden administration is widely expected to tighten sanctions on Russia and Iran, adding upward pressure to prices already supported by low oil stockpiles. Further bolstering the bullish sentiment is a forecast from the U.S. weather bureau for colder-than-average temperatures in the central and eastern U.S., coupled with persistent cold weather in Europe, which is expected to boost demand for heating oil. JPMorgan analysts predict a substantial increase in global oil demand in the first quarter of 2025, driven partly by this increased need for heating fuels.
Inflationary pressures, linked to potential tariffs, are also contributing to crude’s rise. Investors often seek refuge from rising consumer prices by buying oil futures. Crude’s advance comes despite a strengthening U.S. dollar, which typically makes oil more expensive for buyers outside the U.S.
Crude is on its third consecutive week of gains amid the potential for new sanctions. Even though the United States has never traded more Russian oil, the imposition of sanctions could block other countries from buying Russian oil. Brent crude is trading above $80 a barrel today, its highest level since October 2024. Today, a very important resistance level in the form of the 200-period moving average has been broken. The 50.0 Fibonacci retracement of the last major downward wave has also been breached. Source: xStation5
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