Investing.com — Oil prices rose Tuesday but stayed within a tight trading range as traders remained uncertain about a potential supply glut and weakening demand in the coming year.
At 11:58 ET (17:58 GMT), the price rose 1.1% to $73.44 per barrel, and 1.2% to $70.03 per barrel.
Trading volumes were thin ahead of the Christmas holidays, while the dollar’s strength also weighed on oil prices after the Federal Reserve announced a slower pace of interest rate cuts through 2025.
Oil will cause losses in 2024 because demand is tickling
and WTI prices are down about 5% so far in 2024, with continued concerns about slowing demand in China a key pressure point.
Chinese oil imports have fallen steadily this year as the world’s largest oil importer grapples with slowing economic growth. Although the country outlined plans to increase fiscal spending and stimulus measures in the coming year, markets were still waiting for more clarity on the planned measures.
Increased adoption of electric vehicles in China also undermined fuel demand in the country.
Both OPEC and the IEA predict slower demand growth in 2025 due to slowing demand in China. The country is also expected to face increasing economic headwinds due to a renewed trade war with the US under Donald Trump.
The uncertainty about supply calls for caution; US inventory data was expected
Oil markets have been tense due to a potential supply glut in 2025. Although OPEC recently agreed to extend ongoing supply cuts until at least mid-2025, production elsewhere could potentially increase.
U.S. oil production remained near record highs and could increase in the coming year, especially as Trump pledged to boost domestic energy production.
US inventory data from the , is expected later Tuesday and will provide more clues about oil production and supply.
(Peter Nurse contributed to this article.)
