The first day of trading in 2025, Thursday, saw a small increase in the price of oil globally.
By 05:47 GMT, Brent oil futures had increased 17 cents, or 0.06%, to $74.80 a barrel, while U.S. West Texas Intermediate crude futures had increased 19 cents, or 0.26%, to $71.91 a barrel.
On Tuesday, New Year’s Eve, WTI closed 73 cents higher than Brent, which had increased 65 cents.
Due to Middle East hostilities and a decline in China’s oil consumption, oil prices fluctuated throughout 2024.
Investors are watching China’s economy grow
Following President Xi Jinping’s pledge to encourage growth in 2025, Reuters stated that oil investors are hopeful about a potential expansion of China’s economy and the ensuing demand for oil from the Asian behemoth.
- The president of China promised in his New Year’s speech to enact more aggressive measures to boost economic expansion in 2025.
- China’s factory activity grew slowly in December 2024, according to a Caixin/S&P Global poll released on Thursday. The country’s services and construction sectors also showed a minor rebound, which may be a sign of policy stimulus.
- Investors, meanwhile, are worried about the potential effects of tariffs that US President-elect Donald Trump, who takes office on January 20, has vowed.
- According to reports, investors are also anticipating the Energy Information Administration’s weekly U.S. oil stocks data, which has been postponed until Thursday because of the New Year holiday.
Tony Sycamore, an IG market analyst, told Reuters that WTI’s weekly chart is getting narrower, which means a big price shift is about to happen.
“Tomorrow’s US ISM manufacturing release will be key to crude oil’s next move… Rather than trying to forecast in which way the break will occur, we would be tempted to wait for the break and then go with it,” he remarked.
Nigeria’s anticipated oil price for the year
The administration of President Bola Tinubu pledged to increase oil production over 2 million barrels per day and based the 2025 budget on the expectation that world oil prices would hover around $75 per barrel.
Factors influencing the price of oil in 2025
China
It is anticipated that China’s oil consumption would peak in 2025. The price of oil would probably increase if this occurred. The Economic and Technological Research Institute (ETRI) of the China National Petroleum Corporation has anticipated that the world’s second-largest economy will require about 770 million tonnes of oil in 2025.
Demand in India
Additionally, if demand increases in India, which presently has the largest population in the world, oil prices could soar. India is expected to overtake China as Asia’s largest oil market, according to experts.
Trump’s “drill, baby drill” promise
As soon as he takes office, President Trump has promised to boost US oil production. Experts warn that since the private sector dominates the US oil and gas sector, this might not occur.
The impact of OPEC
Last year, the Organisation of the Petroleum Exporting Countries (OPEC) had difficulty keeping oil prices under control by reducing supply. How much of an effect it can have on the oil market in 2025 is unknown. According to experts, OPEC may not have as much influence over the world oil market as it formerly did.
