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As 2024 drew to a close, oil prices rose marginally on December 27th, as investors continued to assess the market outlook for 2025. West Texas Intermediate (WTI) topped $70 a barrel, while Brent Crude traded near $74. A gauge of 10-day volatility for WTI ebbed to the lowest since July, according to a report by Bloomberg.

This pricing threshold is below the benchmark oil price of $75 per barrel set in the Nigerian 2025 budget proposal before the National Assembly.

Volatile geopolitical conflicts in the Middle East are a key development that investors are tracking due to its potential impact on oil prices in 2025.

Late in December, Israel struck targets in Yemen that it said were controlled by Houthis, including power stations, ports, and the capital’s airport. The Yemeni rebels have been menacing shipping in the Red Sea, forcing oil tankers onto longer routes around southern Africa.

Also, there are widespread concerns the oil market may be oversupplied in 2025 as China’s demand slows and global production expands, although traders remain cautious about potentially tighter US sanctions against flows from Iran under President Donald Trump.