(Bloomberg) — Oil edged higher as traders focused on 2025 risks, from ample supply to the unpredictability of the incoming Trump administration.
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Brent traded near $74, heading for a modest drop of about 3% this year. There are widespread expectations that the market will be oversupplied in 2025, which is likely to make it harder for OPEC and its allies to revive idled production.
The actions of President-elect Donald Trump will keep traders on edge after he takes office in January. He has already threatened tariffs on oil producers Canada and Mexico, while his pick for national security adviser vowed “maximum pressure” on Iran.
Crude has been confined to a narrow price range since mid-October. The market has been buffeted by bullish and bearish signals, including persistent hostilities in the Middle East and concerns around Chinese demand, the world’s biggest oil importer.
Most traders and analysts have “adopted a cautious outlook for 2025 given multiple uncertainties,” said Ole Hansen, head of commodities strategy at Saxo Bank.
That includes the risk of Trump tariffs hurting global growth and demand, China’s economic outlook, the pace of the transition towards electrification, and the ability of OPEC+ to stick together amid falling prices and high levels of spare capacity, he said.
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