LONDON (Reuters) – Oil prices fell on Friday and were poised for a second straight weekly decline as a potential supply glut and prospects of a Russia-Ukraine peace deal offset concern over disruptions from a blockade of Venezuelan oil tankers.
Brent crude futures lost 17 cents, or 0.28%, to $59.65 a barrel by 0915 GMT while US West Texas Intermediate crude was down 31 cents, or 0.55%, at $55.84.
On a weekly basis, the Brent and WTI benchmarks were down 2.4% and 2.8% 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 US President Donald Trump's intent to block sanctioned tankers from entering and leaving Venezuela tempered geopolitical risk premiums and weighed on oil prices on Friday, said IG analyst Tony Sycamore.
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 US-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.