(Bloomberg) — Oil rose in thin holiday trading to close out a flat performance in 2024 as the market braces for a global surplus next year.
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West Texas Intermediate rose 1% to settle at $71.72 a barrel, notching a 7-cent gain in 2024. Brent advanced 0.3% to settle at $74.64, down 3.1% for the year.
Crude advanced on Tuesday after factory activity expanded for a third month in China, the world’s oil biggest importer. In another sign of nascent economic recovery, Chinese President Xi Jinping said the nation’s gross domestic product is expected to expand around 5% for the full year of 2024, meeting official targets.
Bullish bets on WTI reached a four-month high in the penultimate week of 2024 as investors positioned for potential gains in the new year.
Crude has been stuck in a narrow trading range since mid-October, drawing support from geopolitical turmoil and resistance from prospects for a global oversupply in 2025. Some banks have forecast crude prices will continue to weaken over the next two years.
On the other hand, a potential flare-up in hostilities in the Middle East or Ukraine could provide short-term support for oil. Trump’s pick for national security adviser has vowed to restore the “maximum pressure” campaign on Iran that squeezed the nation’s crude exports during Trump’s first term.
“I’m not fully buying into this overwhelming bearishness,” said John Driscoll, director and founder of Singapore-based consultant JTD Energy Services Pte. “We may yet see some discipline on the upstream side from the oil producers, and I would not rule out the possibilities of black swans like geopolitical events or extreme weather.”
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