Brent crude extends gains, crosses $77

Oil drilling rigs

Oil prices turned higher today, Jan. 7, driven by concerns about shrinking supplies from Russia and Iran due to Western sanctions, and higher Chinese demand expected backed by government stimulus plans for the economy.

Brent crude futures for March delivery rose 1%, or 75 cents, to close at $77.05 a barrel, after falling earlier in the session to $75.91.

WTI crude futures for February delivery added 0.95%, or 69 cents, to $74.25 a barrel.

Market participants are starting to price in some supply disruption risks to Iranian crude exports to China, Reuters reported, citing UBS Analyst Giovanni Staunovo.

The American Petroleum Institute's report on oil inventories is expected to be released on Jan. 8, before the official inventory data from the US Energy Information Administration is released, amid expectations of a 1.8 million barrel drop in crude inventories.