Oil Prices Hold Steady Amid Uncertainty

Oil prices remained steady, with West Texas Intermediate trading near $71 per barrel and Brent crude above $74. Despite a 1.6% gain last week, the market faces headwinds as traders anticipate ample supply in 2025. The potential oversupply could challenge OPEC+ efforts to restore idled production and stabilize prices.

2024 Performance and Market Drivers

Crude is on track for an annual loss, trading within a narrow range since mid-October. The market has been swayed by contrasting factors, such as tensions in the Middle East and subdued demand from China, the world’s largest oil importer.

Trump’s Second Term Fuels Uncertainty

The incoming Trump administration has introduced a layer of unpredictability for markets. President-elect Donald Trump has hinted at tariffs on oil imports from Canada and Mexico, two key U.S. trading partners. Additionally, his pick for national security adviser has pledged “maximum pressure” on Iran, raising geopolitical risks that could impact global supplies.

OPEC+ Faces Challenges Ahead

OPEC+ has struggled to time its production strategy amid forecasts of ample supply and weakening demand. Analysts, including Samsung Futures’ Kim Kwangrae, suggest the group may have missed its window to restore production without risking further price declines.

What Lies Ahead for Oil in 2025

As 2025 approaches, markets are bracing for potential volatility. Key factors to watch include the Trump administration’s trade and energy policies, global supply-demand dynamics, and OPEC+ production decisions.