Oil prices traded higher on Friday and were on track to post their second straight annual gains.
Oil had a stormy year marked by tight supplies due to the Ukraine war, a strong dollar and weakening demand from China.
U.S. West Intermediate crude traded around $78.00 a barrel. It is on track to rise 4.5% in 2022, following a 55% gain last year.
The US oil benchmark reached a 14-year high of $130 per barrel in March as Russia invaded Ukraine.
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The jump in oil prices translated into pain at the pump as the price for a gallon of regular gasoline hit an all-time high of $5.016 on June 14.
Brent crude futures traded around $82.00 a barrel. Brent looked set to end the year with a 7.6% gain, after jumping 50.2% in 2021.
Prices surged in March to a peak of $139.13 a barrel, a level not seen since 2008.
Oil prices cooled as central banks across the world hiked interest rates to fight inflation, boosting the U.S. dollar.
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That made dollar-denominated commodities a more costly investment for holders of other currencies.
Also, China’s zero-COVID restrictions, which were only eased in December, squashed oil demand recovery hopes for the world’s No. 2 consumer.
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While China is expected to slowly recover in 2023, a surge in COVID cases in the country and global recession concerns are clouding the commodities demand outlook.
Reuters contributed to this report.