Investing.com--Oil prices rose Tuesday, reversing earlier declines, boosted by signs of colder weather as well as concerns that escalating Western sanctions could hit support.
At 09:00 ET (14:00 GMT), Brent oil futures expiring in March rose 0.7% to $76.77 a barrel, while West Texas Intermediate crude futures gained 0.5% to $73.92 a barrel.
Polar vortex boosts demand
Prices have been helped by severely cold weather in the US and Europe will push up demand for oil, especially distillates used for heating purposes.
A polar vortex is set to cause snowstorms across swathes of the US, while also dropping temperatures in Europe.
Expectations of improving demand were also spurred by Saudi Aramco- the world’s biggest oil exporter- raising crude oil prices for Asian buyers in February, its first price hike in three months.
Additionally, fears of tighter Russian and Iranian supply due to escalating Western sanctions have lent support.
Weak economic data spurs demand fears
Traders are also studying global economic data for signs of global growth.
Eurozone inflation accelerated in December, an increase that is unlikely to derail further interest rate cuts from the European Central Bank, but would still be unwelcome.
Softer-than-expected U.S. purchasing managers index data for December raised concerns that business activity in the world’s biggest fuel consumer was easing, presenting a softer outlook for demand.
The readings come just before a slew of key inflation and labor market prints from the US, which are likely to factor into the economic outlook.
Crude oil production fell March
Preliminary OPEC production numbers are starting to come through, and according to a Bloomberg survey, crude oil production fell by 120,000 b/d MoM to total 27.05m b/d in December, analysts at ING said, in a note.
Declines were driven by the UAE, Kuwait and Iran, where the former saw production falling by 100,000 b/d, while the latter two saw output decline by 40,000 b/d. Meanwhile, Iraqi oil production is estimated at 4.12m b/d, still above its production target of 4m b/d.
(Ambar Warrick contributed to this article.)