Story perspectives
Oil Traders Face Losses as Algorithms Fail in 2024
1/14/2025
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Story summary
- Algorithmic trading in oil markets led to losses for traders in 2024, marking two consecutive years of decline.
- Traders overlooked key fundamentals, focusing instead on China's demand slump and oversupply issues.
- Oil prices remained in the narrowest range since 2019, prompting a reduction in algo traders' portfolio weight.
- Expectations of tighter sanctions on Iranian and Russian oil have begun to drive prices higher.
- Analysts predict a return to fundamentals-based trading in 2025, potentially influencing future oil prices.
