Oil futures have climbed as year-end trading remains subdued. Investors are closely monitoring Middle East developments while assessing the market outlook for 2025. West Texas Intermediate (WTI, Financial) crude futures rose by 1.4%, settling around $71 per barrel, while Brent crude surpassed $74. A measure of WTI's 10-day volatility fell to its lowest level since July.
Recent Israeli airstrikes targeted areas in Yemen reportedly controlled by Houthi forces, impacting shipping in the Red Sea and forcing tankers to reroute via longer African routes. According to the U.S. Energy Information Administration (EIA), U.S. crude inventories decreased by 4.2 million barrels last week, with Gulf Coast refinery crude processing hitting a five-year high.
The WTI front-month contract's premium over the further-month contract exceeded 40 cents, indicating short-term supply tightness. The February delivery WTI futures rose 1.4%, settling at $70.60 per barrel, while Brent crude for February delivery increased by 1.2% to $74.17 per barrel.
