Investing.com– Oil prices rose on Tuesday, but remained in a tight trading range as traders remained uncertain of a potential supply glut and softening demand in the coming year.

At 11:58 ET (17:58 GMT), it rose 1.1% to $73.44 a barrel, and rose 1.2% to $70.03 a barrel.

Trading volumes were thin ahead of the Christmas holiday, while dollar strength also weighed on oil prices after the Federal Reserve signaled a slow rate cut in 2025.

Oil nurses lost in 2024 as needs weigh up

and WTI prices are down about 5% so far through 2024, with continued concerns over slowing Chinese demand a key pressure point.

China’s oil imports have fallen steadily this year as the world’s largest oil importer struggles with slowing economic growth. While the country is drawing up plans to increase fiscal spending and stimulus measures in the coming year, markets are still waiting for more clarity on the planned measures.

China’s increased adoption of electric vehicles has also hurt the country’s demand for gasoline.

Both OPEC and IEA forecast slower demand growth in 2025 due to slowing Chinese demand. The country is also expected to face growing economic difficulties from a recent trade war with the US under Donald Trump.

Supply uncertainty encourages caution; US inventory data is pending

Oil markets are on the brink of a potential supply glut in 2025. While OPEC recently agreed to extend its ongoing supply cuts until mid-2025, production elsewhere is likely will increase.

US oil production remains near record highs, and may increase in the coming year, especially as Trump promises to increase domestic energy production.

US inventory data, from , is due later on Tuesday and is set to provide further indications of oil production and supply.

(Peter Nurse contributed to this article.)