Oil Extends Gains As Parts of Europe, U.S. Enter Deep Freeze

Meanwhile, the Trump presidency bodes well for oil investment: File Image/Pixabay

Oil traders on Friday solidified their bullish positions with regards to a hopeful outlook on China and colder weather stoking demand, the result being two key benchmarks on Friday heading towards weekly gains.

Brent rose 69 cents at $76.62 per barrel by 1749 GMT, and West Texas Intermediate settled up $1.11 to $74.24; for the week Brent was on track for a 3.3 percent gain, while WTI was aiming for a 5 percent increase.

John Kilduff, founding partner at Again Capital, said, "China just is unceasing at this point in terms of their announcements about trying to stoke economic activity, and the market's taking note of that."

Kilduff was referring to Beijing's surprise move to raise wages for government workers along with a sharp increase in funding from ultra-long treasury bonds to spur business investment.

Boosting sentiment further was independent Chinese refiners receiving increased import quotas, suggesting stronger demand projections from one of the world's largest oil consumers.

Meanwhile, colder temperatures across Europe and the U.S. were said to have increased demand for heating oil, and Phil Flynn, senior market analyst at Price Futures Group Inc., told media that additional upward pressure could happen because "When you get a cold event like this, not only do you see record demand, but then you have the possibility of infrastructure freezing up: they have to shut the wells down because it's too dangerous to produce."

Meanwhile, in advance of pro-business Donald Trump assuming his second term as U.S. president, a new survey from the Dallas Federal Reserve found that about 68 percent of shale executives across Texas, southern New Mexico, and northern Louisiana said they expected capital spending to increase over the coming year, while 14 percent said they expected a "significant increase."

Drilling and completion were the top reasons companies wanted to ramp up investing: 68 percent of those surveyed said they would increase investment in that area, and one executive stated that the Trump administration should "have a positive effect on the economy," which would benefit oil firms.

Bullish sentiment isn't confined to the U.S.: Bloomberg on Friday reported that "the price of some Middle Eastern oil grades strengthened in the final week of December on robust demand from Asian refiners, after barrels from Iran and Russia became sparse and more expensive."

According to traders, prices gained on higher demand from China and India, and active bidding on the Platts window by companies such as TotalEnergies SE.