Back To Bear Territory For Oil As Analysts Disagree On 2025 Market Trajectory

Trump still viewed as a catalyst for a bullish market moving forward: File Image/Pixabay

Amid analytical observations that last week's modest rally was overdone, oil traders on Monday retreated to their familiar bearish stance and caused prices to dip, based on disappointing economic news both domestic and international.

Brent settled down 21 cents at $76.30 per barrel and West Texas Intermediate settled down 40 cents to $73.56 per barrel.

According to data from the U.S. Commerce Department's Census Bureau, new orders for manufactured goods in that country fell in November 0.4 percent after enjoying a 0.5 percent gain the month prior; also, orders for commercial aircraft and parts declined 7 percent in November after rebounding 16.4 percent the month prior.

More bad economic news on Monday emerged from Germany, whose annual consumer price inflation rate rose to 2.9 percent, compared to expectations for a 2.6 percent rise, according to that country's federal statistics office.

Carsten Brzeski, global head of macro at ING, said, "The summer celebrations over successfully conquering the inflation monster were premature."

For its part, Bloomberg suggested that technical markers showed last week's rally may have gone too far: "Futures reversed gains on Monday after the nine-day relative strength index indicated prices were at overbought levels and on a bearish move in WTI's prompt spread."

The news agency added that "Crude may struggle to hold onto gains after last week breaking out of a narrow range it had traded in since mid-October, as expectations for a glut, the possible revival of idled OPEC+ production, and lackluster demand from top importer China weigh on market optimism."

Dennis Kissler, senior vice president for trading at BOK Financial Securities, disagreed, pointing  out that "The fundamentals do support a tighter market" due to near-peak Permian production, Chinese demand that's unlikely to further deteriorate, seasonally low U.S. inventories, and positioning in advance of incoming U.S. president Donald Trump's expected pro-business policy changes.

Meanwhile, Trump continued to weigh heavily on the minds of analysts, and a consensus in some circles on Monday was that his hawkish stance on Iran spurred reluctance to be short, and the potential for his tariffs to spike inflation was boosting the use of long bets as a hedge.