Global oil prices rallied in American trade on Friday to a three-month high, and expanded the gains for the third straight session, about to mark the third weekly profit in a row on the prospects of new US sanctions on Russia and Iran. 

Prices are also supported by a slowdown in crude supplies from some OPEC producers and Russia in December, with mounting hopes for improving global demand due to the colder climate. 

Prices

US crude rose 3.8% today to $77.03 a barrel, with a session-low at $74.05.

Brent added 3.5% to $79.88 a barrel, with a session-low at $77.06.

On Thursday, US crude rallied 1.35%, while Brent climbed 1.4%, marking the second profit in three days on hopes of US demand. 

Weekly Trades

Oil prices are up 4.25% so far this week on track for the third weekly profit in a row.

US Sanctions

Before Donald Trump’s inauguration on January 20, it’s expected that supply interruptions will occur due to more stringent US sanctions on Russian and Iranian oil exports.

Media reports indicated US President Joe Niden plans to impose more sanctions on Russia for its war on Ukraine, targeting Russian oil tankers.

Goldman Sachs expects Iranian oil production and exports to take a hit in the second quarter due to new US sanctions. 

US Stocks 

The Energy Information Administration reported a drop of a million barrels in US crude stocks in the week ending January 3, the seventh such decline in a row, while analysts expected a drop of 1.8 million barrels.

According to the data, the total stocks are down to 414.7 million barrels, the lowest since September 20, a positive sign for demand in the US.

Global Supplies 

According to a survey by Reuters, oil production from exporting countries dropped in December after two months of increases, with field maintenance work in the UAE compensating the Nigerian production hike.

In Russia, production averaged 8.971 million bpd in December, below the targets.

Global Demand 

SEB analysts expect Brent and oil prices overall to enjoy a boost as northern Europe and the US face cold spills, while natural gas prices climb.

Such factors would boost demand on crude oil, with some industries already shifting gears from natural gas to oil to save costs.

Higher crude refinery profits are also boosting production and increasing demand on crude contracts.

Canada's unemployment rate fell to 6.7% in December, below estimates of 6.9%, and better than November's 6.8% reading. 

The Canadian economy added 90.9 thousand new jobs in December, beating estimates of an addition of 24.9 thousand, and up from the addition of 50.5 thousand jobs in November. 

The US economy added 256 thousand new jobs in December, beating estimates of an addition of 164 thousand new jobs, with the previous reading revised to show the addition of 212 thousand jobs.