OIL PRICE: BRENT NEAR $82, WTI ABOVE $79

REUTERS - Jan 17, 2025 -  Oil prices rose on Friday and headed towards a fourth consecutive weekly gain as the latest U.S. sanctions on Russian energy trade hit supply and pushed up spot trade prices and shipping rates.

Brent crude futures rose 44 cents, or 0.5%, to $81.73 per barrel by 0443 GMT, U.S. West Texas Intermediate crude futures were up 62 cents, or 0.8%, to $79.3 a barrel.

Brent and WTI have gained 2.5% and 3.6% so far this week.

"Supply concerns from U.S. sanctions on Russian oil producers and tankers, combined with expectations of a demand recovery driven by potential U.S. interest rate cuts, are bolstering the crude market," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

"The anticipated increase in kerosene demand due to cold weather in the U.S. is another supportive factor," he added.

The Biden administration last Friday announced widening sanctions targeting Russian oil producers and tankers, followed by more measures against Russia's military-industrial base and sanctions-evasion efforts.

Moscow's top customers China and India are now scouring the globe for replacement barrels, driving a surge in shipping rates.

Investors are also anxiously waiting to see any possible more supply disruptions as Donald Trump takes office next Monday.

"Mounting supply risks continue to provide broad support to oil prices," ING analysts wrote in a research note, adding the incoming Donald Trump administration is expected to take a tough stance on Iran and Venezuela, the two main suppliers of crude oil.

Better demand expectations also lent some support to the oil market with renewed hopes of interest rate cuts by the U.S. Federal Reserve after data showed easing inflation in the world's biggest economy.

Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday.

Meanwhile, China's economic data on Friday showed higher-than-expected economic growth for the fourth quarter and for the full year 2024, as a flurry of stimulus measures came into effect. 

However, China's oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic-hit year of 2022, government data showed on Friday, as plants pruned output in response to stagnant fuel demand and depressed margins.

Also weighing on the market was that Yemen's maritime security officials said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea, after a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.

The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.

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