By Kayode Sanni-Arewa

On Thursday, marking the inaugural trading day of 2025, global oil prices experienced a modest increase.

Brent crude futures experienced an increase, reaching $74.80 a barrel by 0547 GMT, marking a gain of 17 cents, or 0.06%

Meanwhile, U.S. West Texas Intermediate crude futures rose by 19 cents, or 0.26%, settling at $71.91 a barrel

On Tuesday, New Year’s Eve, Brent crude oil prices increased by 65 cents, while West Texas Intermediate (WTI) saw a rise of 73 cents on the same day

In 2024, global oil prices experienced significant fluctuations, driven by ongoing conflicts in the Middle East and a notable decline in oil demand from China

China’s Economic Growth Fuels Optimism.

Investors are closely monitoring the expansion of China’s economy.

According to a report by Reuters, oil investors are expressing optimism regarding potential growth in China’s economy, which may lead to increased oil demand from the Asian powerhouse

This sentiment follows President Xi Jinping’s commitment to fostering growth by 2025

In his New Year’s address, the President of China committed to enacting more proactive policies aimed at stimulating economic growth in 2025

China’s factory activity experienced sluggish growth in December 2024, according to a recent survey by Caixin and S&P Global

However, there are indications of a modest recovery in the services and construction sectors, pointing to the potential impact of policy stimulus measures.

Impact of US Economic Policies

As US President-elect Donald Trump prepares to take office on January 20, investors are expressing concerns about the potential effects of tariffs

Due to the New Year holiday, the Energy Information Administration has delayed the release of the weekly U.S. oil stocks data until Thursday, which investors are currently anticipating

Market analyst Tony Sycamore shared insights with Reuters, noting that the weekly chart for WTI is narrowing, suggesting that a significant price movement is on the horizon

The upcoming US ISM manufacturing release is poised to play a crucial role in determining the next direction for crude oil prices.

Instead of attempting to forecast the direction of the impending break, he suggested that it would be more prudent to observe it as it happens and then align with it.

Nigeria’s oil price assumption for the year

The administration of President Bola Tinubu has established the 2025 budget based on the expectation that global oil prices will hover around $75 per barrel.

Additionally, the government has committed to increasing oil production to exceed 2 million barrels per day

Elements influencing oil prices in 2025. We project China’s oil demand to peak in 2025. We anticipate an increase in oil prices should this occur

The Economic and Technological Research Institute (ETRI) of the China National Petroleum Corporation forecasts an increase in oil demand to around 770 million tonnes in the world’s second-largest economy by 2025. India’s Demand: If demand surges in India, the country with the highest population globally, we could witness a significant increase in oil prices. Analysts predict that India is poised to overtake China as the dominant oil market in Asia.

Trump’s commitment to the slogan “drill, baby, drill” has sparked significant discussion regarding energy policies and environmental implications. Upon taking office, President Trump has committed to an immediate increase in oil production within the United States. Experts suggest that this scenario may be unlikely, as the private sector predominantly influences the oil and gas industry in America. The impact of OPEC: Last year, the Organization of the Petroleum Exporting Countries (OPEC) faced challenges managing oil prices despite implementing production cuts.

We cannot yet predict the potential impact on the oil market in 2025. Analysts suggest that OPEC’s influence in the global oil market has diminished compared to its historical prominence.