Oil prices dipped on Friday and appear set for a weekly decline as traders focused on signs of a widening supply glut and the potential for a Russia-Ukraine peace agreement.
Brent crude slipped 19 cents, or 0.31%, to $61.09 per barrel by late morning trading.
U.S. West Texas Intermediate fell 15 cents, or 0.26%, to $57.45.
Both benchmarks dropped around 1.5% in the previous session.
Despite the downward trend, analysts say some geopolitical risks remain supportive of prices.
Geopolitical Tensions Add Limited Support
Janiv Shah of Rystad Energy noted that tensions between the U.S. and Venezuela and recent Ukrainian drone strikes on a Russian oil rig in the Caspian Sea could provide intermittent upward pressure.
The U.S. is preparing to intercept additional vessels transporting Venezuelan oil following the seizure of a tanker earlier this week, according to several sources familiar with the situation.
Meanwhile, Russia’s seaborne oil exports in November fell just 0.8% from October.
The end of refinery maintenance offset weaker fuel shipments from the Black Sea and Azov Sea regions.
Broader Market Mood Remains Bearish
For the week, Brent and WTI are both down more than 4%, reflecting persistent concerns about oversupply and slowing demand.
Analyst Tamas Varga of PVM Oil Associates said the market is likely to see temporary rallies driven by supply disruptions, but the overarching sentiment remains cautious.
He said the general expectation is that supply will continue outpacing demand, limiting any sustained upward price movement.
Supply and Demand Outlook
New data from the Organization of the Petroleum Exporting Countries suggests that global supply will closely match demand in 2026.
The outlook contrasts with projections from the International Energy Agency and marks a more bearish shift from OPEC’s earlier forecasts, which had predicted demand would exceed supply.
Traders say the evolving forecasts have added to uncertainty and contributed to a more defensive market stance.
