Crude oil prices went up on Monday as investors bet on a temperature drop across the United States and Europe over the coming weeks to boost diesel demand.

Brent crude futures jumped by 22 cents or 0.3 per cent to settle at $74.39 a barrel and the US West Texas Intermediate (WTI) crude gained 39 cents or 0.6 per cent to trade at $70.99 a barrel.

Reuters reported that concerns about colder weather in the weeks ahead are boosting diesel as a substitute for natural gas in space heating.

Heating degree days, a measure of energy demand for space heating, are expected to rise to 499 over the next two weeks in the US, compared with 399 estimated on Friday.

There is also anticipation that the weather will be colder in Europe in February 2025.

Further support for oil prices could come from declining US crude stockpiles, which are expected to have fallen by about 3 million barrels last week.

Last week, prices were buoyed by a larger-than-expected drawdown from US crude inventories in the week ended December 20 as refiners ramped up activity and the holiday season boosted fuel demand.

Investors are also waiting for China’s PMI factory surveys, due on Tuesday, followed by the US ISM survey on Friday, to gauge the economic health of the top oil-consuming nations.

Market analysts warned that China, the world’s largest oil importer, faces a weaker economy which could lead to oversupply in oil markets next year.

This happens as Chinese authorities issued over 152 million metric tons of crude oil import quotas to independent refiners to be able to get enough for their refineries.

The Asian country has seen lacklustre oil demand and crude imports in 2024 amid a weaker-than-expected economy and faltering demand for road transportation fuels.

Chinese authorities have agreed to issue a record 3 trillion Yuan ($411 billion) in special treasury bonds in 2025 to revive economic growth.

Oil market participants are also speculating that US President-elect Donald Trump will cut Iranian crude oil exports to below 500,000 barrels per day through sanctions, taking over 1 million barrels of daily crude oil supply off the global market.

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