Oil prices appear poised to level off after a nearly six-month rally pushed futures to 2½-year highs at the close of 2017, analysts say. But several geopolitical hot spots could keep the run-up in the energy complex alive.
The oil market owes much of its gains to OPEC and Russia's deal to limit output this year. International benchmark Brent crude ended the fourth quarter nearly 18 percent higher, near $67 a barrel, while U.S. crude surged nearly 17 percent to more than $60.
Prices got a boost as tensions flared in the Middle East, Venezuela and parts of Africa, and analysts say continued turmoil could be the key to further gains.
"If you want to say, 'How do we break out of this range?' it would be a geopolitical story," Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC's "Worldwide Exchange" on Friday.
Oil supplies from Iraqi Kurdistan fell after a dispute between the central government in Baghdad and the semi-autonomous region. Concerns about stability in Saudi Arabia following a political crackdown also boosted markets in the fourth quarter.
Croft expects the market to soften in the first quarter of 2018 due to seasonally weak demand — unless one of several first-quarter shocks rears its head.