BUSINESS – Oil markets were pressured again on Friday, with crude prices slipping and set to close lower for a second consecutive week, as investors balanced softer supply-risk fears against the uncertain outlook for geopolitical disruptions. According to Reuters, Brent crude futures dropped about 0.2% to $59.73 a barrel early Friday, while U.S. West Texas Intermediate (WTI) crude dipped around 0.3% to about $56, leaving both benchmarks down over 2% on the week.
A key factor behind the slide was growing optimism around a possible peace deal to end the Russia-Ukraine war, which traders fear could unlock previously sidelined Russian barrels and ease supply bottlenecks that had buoyed prices earlier in the year. U.S. President Donald Trump said Thursday that talks aimed at resolving the conflict are “getting close to something,” ahead of planned discussions with Russian officials — a comment that helped temper the risk premium baked into oil prices.
At the same time, efforts by the United States to tighten restrictions on Venezuelan tanker movements — including a blockade order and the Coast Guard’s seizure of a Venezuelan oil tanker — introduced another potential supply disruption. But it remained unclear how aggressively Washington would enforce the measure, especially since Venezuela accounts for roughly 1% of global crude supply, leaving traders cautious about its real impact.
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Market analysts noted that the combination of diplomatic progress on Ukraine and uncertainty about Venezuelan enforcement has eased long-standing supply concerns, prompting a reduction in crude risk premiums. Tony Sycamore, an analyst at IG, explained that this mix of “uncertainty over enforcement details and optimism that a potential U.S.-led Ukraine peace deal could still emerge (are) easing global supply concerns and tempering geopolitical risk premiums.”
Looking ahead, technical traders are watching key price thresholds: a rebound above resistance near $56.70–$56.90 could challenge recent lows and signal renewed support, while a drop below roughly $54.98 might push crude even lower toward the psychologically significant $50 mark, reinforcing the bearish trend.
Despite the weekly pullback, some analysts argue the lower price environment may help cut overall supply, slowing the pace of production increases and potentially preventing an uncontrolled downturn. Bank of America strategists have suggested that prices drifting down might encourage producers to recalibrate output, which could arrest the slide if demand fundamentals hold up.
In essence, the oil market right now reflects a complex blend of geopolitical signals, shifting expectations for peace efforts, and technical market dynamics, with traders keeping a close eye on how supply-side developments and diplomatic progress will shape energy prices into the new year.
