The 2025 rally across petroleum futures continued Monday thanks to the recognition that U.S. sanctions announced Friday are likely to reduce the amount of Russian crude on the market.

That recognition is driving front end prices to multi-month highs, with diesel doing particularly well thanks to extended cold temperatures in the Northern hemisphere.

Various estimates from investment banks imply that somewhere between 750,000 b/d and 1 million b/d of Russian crude may be stranded in that country thanks to tougher sanctions on tankers. So far, banks have not raised price targets for crude benchmarks, but Brent and West Texas Intermediate are flirting with numbers last seen in August.

WTI saw particularly strong buying interest, with February getting as high as $79.01/bbl. That contract was ahead $2.21 at midday, resulting in a price of $78.78/bbl. The gains are heavily skewed to the front end -- December 202 prices are barely above $70.21/bbl.

Brent is also higher but by a more manageable increase of $1.37/, resulting in a price of $81.13/bbl. The back end of 2025 is nowhere near as strong, with bids just above $74/bbl.

Also impacting crude were comments from the premier of Alberta, Danielle Smith, who visited with President-elect Donald Trump at Mar-a-Lago this weekend. Smith described the talks as "friendly and constructive" but indicated that the province and country were planning for the imposition of 25% tariffs on oil.

Among refined products, diesel is paying the bills for refiners across the world. Extended weather forecasts now imply colder-than-normal temperatures through most of January. Some U.S. spot markets now find diesel fetching a price nearly $30/bbl above WTI.

The February contract caught plenty of buyer attention this morning with a price of $2.5371/gal reflecting a 3.54ct increase on the day. Cash markets were up 3.25-4cts/gal across all bulk venues in the U.S.

Gasoline doesn't have the same seasonal luster, and the market may get some very subpar demand readings from the Energy Information Administration in the next couple of weeks. February RBOB futures were ahead 3.69cts at $2.1118/gal and cash markets were up 2.75-3.75cts across the country.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.


--Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com


(END) Dow Jones Newswires

01-13-25 1234ET