Oil prices retreated during Friday's Asian session but remained on track for a modest weekly gain, as market participants balanced concerns over weaker United States demand with heightened uncertainty surrounding Russian supply.
By 2:30 pm AEST (4:30 am GMT), Brent crude futures for November delivery slipped 34 cents, or 0.5%, to US$67.64, while West Texas Intermediate (WTI) crude futures declined 36 cents, or 0.6%, to US$64.24.
For the week, Brent and WTI crude are set to rise by 0.6% and 0.8%, respectively.
This week’s price support came from geopolitical tensions, including Ukrainian strikes on Russian oil export terminals.
Market sentiment was further influenced after German Chancellor Friedrich Merz said on Thursday that he believes there would be no meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy.
ANZ analysts wrote: "That decreases the likelihood of more Russian supplies reaching broader markets. Moreover, it brings back the risk of the Trump administration applying additional sanctions on buyers of Russian crude in an effort to keep any ceasefire talks alive."
Still, expectations of softer demand weighed on the market as the U.S. summer driving season drew to a close with the Labor Day holiday on Monday.
Additional supply is also expected to come to market as major producers unwind voluntary production cuts.
Geopolitical risks remain in focus. Russian attacks on Kyiv on Thursday killed 23 people, raising speculation that Washington may tighten sanctions further.
Investors are also monitoring India’s stance after President Donald Trump doubled tariffs on Indian imports to as much as 50% on Wednesday, while urging New Delhi to halt purchases of Russian crude.
