Oil prices slipped in Asian trade on Friday but remained on course to snap a two-week losing streak, with geopolitical tensions and supply signals keeping a floor under the market.
By 2:35 pm AEST (4:35 am GMT), Brent crude futures were down 13 cents, or 0.2%, at US$67.54 a barrel, while West Texas Intermediate (WTI) futures eased 12 cents, or 0.2%, to US$63.40.
Both benchmarks had gained about 1.2% in the prior session, leaving Brent up 2.7% for the week and WTI ahead by 1.1%.
Traders raised their risk premiums as prospects dimmed for a swift resolution to the Russia-Ukraine conflict. Optimism had recently been pinned on United States President Donald Trump’s efforts to broker peace, but progress has stalled.
“President Trump continues to work towards setting up a meeting between the warring sides. However, so far, the Kremlin has been non-committal. Any peace deal would likely lead to fewer restrictions on Russian crude,” analysts at ANZ noted.
The conflict showed no signs of abating on Thursday as Russia launched an airstrike near Ukraine’s EU border, while Kyiv reported hitting a Russian oil refinery.
Military planners in the U.S. and Europe said they were preparing new options after in-person talks between Trump and Russian President Vladimir Putin yielded little progress.
According to sources cited by Reuters, Putin has demanded that Ukraine cede the entire Donbas region, abandon NATO aspirations and exclude Western troops from its territory.
Trump has pledged to defend Ukraine under any settlement, but Ukrainian President Volodymyr Zelenskiy dismissed the idea of surrendering internationally recognised land.
Oil was also supported by supply-side dynamics. The U.S. Energy Information Administration reported a 6 million-barrel drop in crude inventories for the week ending 15 August, far exceeding market expectations of a 1.3 million-barrel drawdown.
