London — Oil prices rose on Friday but were poised for a second straight weekly decline as a potential supply glut and prospects of a Russia-Ukraine peace deal limited gains driven by concerns over disruptions from a blockade of Venezuelan tankers.
Brent crude futures were up 52 cents, or 0.87%, at $60.34 a barrel by 1357 GMT while U.S. West Texas Intermediate crude rose 51 cents, or 0.9%, to $56.66.
On a weekly basis, the Brent and WTI benchmarks were down 1.3% and 1.4% respectively.
Analysts are widely projecting a global glut in oil supply next year, boosted by increased output from the OPEC+ producer group as well from the United States and other producers.
“That we’re staying down at these levels indicates that the market is awash with oil right now,” said Ole Hansen, head of commodity strategy at Saxo Bank. “There’s enough oil to mitigate any disruptions.”
Uncertainty over how the U.S. would enforce President Donald Trump’s intent to block sanctioned tankers from entering and leaving Venezuela tempered geopolitical risk premiums, IG analyst Tony Sycamore said.
Venezuela, which pumps about 1% of global oil supplies, on Thursday authorised two unsanctioned cargoes to set sail for China, said two sources familiar with Venezuela’s oil export operations.
Optimism over a potential U.S.-led Ukraine peace deal also eased supply risk concerns, Sycamore said.
However, Bank of America analysts said they expect lower oil prices to curb supply, which could stop prices from going into freefall.
Investors also watched developments in Russia’s war in Ukraine after Kyiv ramped up attacks on Russia’s energy infrastructure. Ukraine struck a “shadow fleet” oil tanker in the Mediterranean Sea with aerial drones for the first time, a Ukrainian official said on Friday.
Reporting by Anna Hirtenstein Additional reporting by Enes Tunagur and Sudarshan Varadhan Editing by David Goodman and Alexander Smith – Reuters
