LONDON: Oil prices are set to end 2023 about 10 percent lower after two years of gains as geopolitical concerns, production cuts and central bank measures to rein in inflation triggered wild fluctuations in prices.

On Friday, oil climbed after falling 3% the previous day as more shipping firms prepared to transit the Red Sea route. Major firms had stopped using Red Sea routes after Yemen’s Houthi militant group began targeting vessels.

Brent crude futures were up 58 cents, or 0.8%, at $77.73 a barrel at 1113 GMT, the last trading day of 2023, while US West Texas Intermediate (WTI) crude futures were up 42 cents, or 0.6%, at $72.19.

Yet the two benchmarks are on track for their lowest year-end levels since 2020, when the pandemic battered demand and sent prices nosediving.

Production cuts by the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, have proved insufficient to prop up prices, with the benchmarks down nearly 20% from the year’s highs.

OPEC+ is currently cutting output by around 6 million barrels per day representing about 6% of global supply. OPEC is facing weakening demand for its crude in the first half of 2024 just as its global market share declines to the lowest since the COVID-19 pandemic on output cuts and member Angola’s exit.

A Reuters survey of 34 economists and analysts forecast Brent crude would average $82.56 in 2024, down from November’s $84.43 consensus, as they predicted weak global growth would cap demand, while geopolitical tensions could provide support.