As the news cycle enters the new year of 2025, some old news appears to have found new significance in the new year. Crude oil prices are back in the headlines. The two major benchmarks, the Brent Crude and WTI Texas index have soared in the recent past.
On Wednesday, January 8, at the time of writing, the Brent Crude stood at USD 77.34, after seeing a jump of USD 0.29 or 0.38 per cent. It rose from the previous closing price of USD 77.05.
When it comes to the WTI index, the same progression was witnessed. The prices grew to USD 74.61 after rising by USD 0.36 or 0.48 per cent on Wednesday. This is higher than the previous closing of USD 74.25.
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Why Is This Surge Happening?
Opec Factor
This current surge is being attributed to some crucial factors. Primarily, it concerns oil production. It is being reported that oil production from OPEC or the Organization of the Petroleum Exporting Countries, which is the cartel of large oil-producing nations was tightened. The production dipped in December, after two months of increase.
In addition, reacting to this, there are also fears of overproduction by non-OPEC countries to neutralise a possible shortage.
Heavy snowfall has resulted in deteriorating road conditions in several states | X (@senguptacanada)
Winter In West
The weather is said to be another factor in play. Winter in the west, on both sides of the Atlantic, is growing in severity, leading to a rise in demand for energy and, by extension, crude oil and natural gas, thereby spiking demand for fossil fuels, driving up their prices.
Global factors of trade and the larger volatility inflicted by conflicts across the board has also played a crucial role in relaying up the price of carbon-emetting fuel. Chinese growth and consumption (China is the largest importer of Non-Renewables) also play a role.
Last but not least, incoming US president Donald Trump, who will take charge on January 20, is also a major reason. His policies, both on the diplomatic front and the energy front, will eventually placate the prices of crude. | PIC: AFP
America In Focus
Biden decision to permanently ban offshore drilling in 625 million acres of ocean has also played a role in the current developments.
Last but not least, incoming US president Donald Trump, who will take charge on January 20, is also a major reason. His policies, both on the diplomatic front and the energy front, will eventually placate the prices of crude.
