Oil prices rose on Friday supported by concerns of Venezuelan supply disruptions, though they remained on track for a weekly drop amid cautious market sentiment and optimism over the prospects for a Russia-Ukraine peace deal.
Brent crude futures rose 32 cents, or 0.52 per cent, to $61.60 a barrel by 07:18 GMT, and US West Texas Intermediate crude was at $57.94 a barrel, up 34 cents, or 0.59 per cent. Both benchmarks fell about 1.5 per cent on Thursday.
The US is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week, as it increases pressure on Venezuelan President Nicolas Maduro, six sources familiar with the matter said on Thursday. The US seizure this week raised concerns about supply disruptions.
"After selling on expectations that supply pressures would ease amid hopes for a Russia-Ukraine peace agreement, buying emerged to pare losses following the US seizure of a Venezuelan tanker," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
"Peace negotiations between Russia and Ukraine will remain the main focus next week and beyond," he said, noting that WTI could test the $55 level if a deal is genuinely reached.
So far this week, both contracts have lost more than three per cent, reflecting broader market uncertainties. ANZ Research analysts attributed recent declines to a risk-off sentiment and a subdued oil market outlook.
The Federal Reserve’s rate cut this week and comments from Chair Jerome Powell, viewed as less hawkish than anticipated, have added to financial market uncertainty about future US monetary policy.
Meanwhile, global oil supply will exceed demand by 3.84 million barrels per day, according to figures from the Paris-based International Energy Agency’s latest monthly oil market report, down from a 4.09 million bpd surplus estimated in November.
But the Organisation of the Petroleum Exporting Countries (OPEC) data published on Thursday indicated that world oil supply will match demand closely in 2026, an outlook that contrasts with projections from the IEA and others of a huge glut.
The US Energy Information Administration reported a smaller-than-expected draw in crude inventories and large builds in fuel stocks last week.
The leaders of Britain, France and Germany held a call on Wednesday with US President Donald Trump to discuss Washington’s latest peace efforts to end the war in Ukraine, in what they said was a "critical moment" in the process.
But on Thursday, Ukrainian drones struck an oil platform in the Caspian Sea for the first time, halting production at the facility owned by Lukoil, according to an official from Ukraine’s Security Service.
(Reporting by Yuka Obayashi in Tokyo and Siyi Liu in Singapore; Editing by Jacqueline Wong)
