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

At 11:58 ET (17:58 GMT),  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 strength in the dollar also weighed on oil prices after the Federal Reserve signaled a slower pace of rate cuts in 2025. 

Oil nurses losses in 2024 as demand jitters weigh 

and WTI prices were down about 5% so far in 2024, with persistent concerns over slowing demand in China being a key point of pressure.

Chinese oil imports steadily dropped this year as the world’s largest oil importer struggled with slowing economic growth. While the country did outline plans to ramp up fiscal spending and stimulus measures in the coming year, markets were still holding out for more clarity on the planned measures. 

Increased electric vehicle adoption in China also undermined fuel demand in the country. 

Both the OPEC and the IEA have forecast slower demand growth in 2025 due to slowing demand in China. The country is also expected to face increased economic headwinds from a renewed trade war with the U.S. under Donald Trump. 

Supply uncertainty spurs caution; US inventory data awaited 

Oil markets were on edge over a potential supply glut in 2025. While the OPEC recently agreed to extend its ongoing supply cuts until at least mid-2025, production elsewhere could potentially increase.

US oil production remained close to record highs, and could potentially increase in the coming year, especially as Trump vowed to ramp up domestic energy production. 

US inventory data, from the , is due later Tuesday and is set to offer more cues on oil production and supply. 

(Peter Nurse contributed to this article.)