Oil steadied in the first session of the new year as an industry report signaled US crude stockpiles continued to shrink.

Brent traded below $75 a barrel after giving up an earlier gain, and West Texas Intermediate was near $72. A report from the American Petroleum Institute showed inventories fell by 1.4 million barrels last week, which would be a sixth straight draw if confirmed by government data later Thursday.

Oil has been stuck in a narrow range since mid-October, with Brent posting a modest annual decline and WTI ending 2024 little changed. Investors are bracing for a glut this year, making it harder for OPEC+ to revive idled production, 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, with recent data showing factory activity slowed its pace of expansion in December. The rapid adoption of new energy vehicles is also chipping away at gasoline demand.

Brent for March settlement rose 0.2% to $74.78 a barrel at 2:31 p.m. in Singapore.

WTI for February delivery advanced 0.2% to $71.87 a barrel.

Source : Bloomberg