(Bloomberg) — Oil edged higher in the first session of the new year after an industry report signaled US crude stockpiles continued to shrink.
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West Texas Intermediate rose for a fourth session to trade near $72 a barrel, after a report from the American Petroleum Institute that showed nationwide inventories fell by 1.4 million barrels last week. If confirmed by government figures later Thursday, it would be a sixth straight weekly draw.
Oil has been stuck in a narrow range since mid-October, with WTI ending 2024 little changed and Brent posting a modest annual decline after closing below $75 a barrel on Tuesday. Investors are bracing for a glut this year, and the unpredictability of a second presidential term by Donald Trump.
“The risks for Brent are to the upside through the first quarter, with a push into the $75 to $80 region likely,” said Robert Rennie, the head of commodity and carbon research for Westpac Banking Corp. “The second half of the year looks to be about the risks of rising supply and weak demand.”
Hostilities in the Middle East and Ukraine are persisting and a flare-up in either region could potentially provide some short-term support for oil prices. Further sanctions that disrupt Iranian and Russian shipments may also boost demand for alternative supplies from the Middle East and elsewhere.
China’s economic recovery remains uncertain, though recent data points to some signs of improvement. The rapid adoption of new energy vehicles across the country, however, is chipping away at gasoline demand.
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