Oil prices slipped during Friday's Asian deals, set to close lower for a second consecutive week as growing optimism over a potential Russia-Ukraine peace deal outweighed concerns about supply disruptions linked to Venezuela.
By 3:15 pm AEDT (4:15 am GMT), Brent crude futures were down 9 cents, or 0.2%, at US$59.73 a barrel, while U.S. West Texas Intermediate crude fell 15 cents, or 0.3%, to US$56.00 a barrel.
On a weekly basis, both benchmarks were down more than 2%.
Sentiment was shaped in part by comments from United States President Donald Trump, who said on Thursday that talks aimed at ending the war in Ukraine were “getting close to something”, ahead of a meeting between U.S. and Russian officials scheduled for the weekend.
That optimism has helped to cap prices, even as traders assess potential supply risks elsewhere.
Markets are still weighing the implications of Washington’s announcement that it would seek to blockade sanctioned oil tankers entering and leaving Venezuela, a country that accounts for about 1% of global oil supply.
However, it remains unclear how such measures would be enforced. Last week, the U.S. Coast Guard seized a Venezuelan oil tanker, raising questions about the broader impact on flows from the OPEC member.
ANZ analysts said uncertainty around Venezuela was building, but warned that the situation could quickly become more complex. “Oil storage facilities and oil tankers there are quickly filling, according to a Bloomberg report.
"Once filled, state-owned Petroleos de Venezuela SA could be forced to shut in wells. Oil companies have told the White House that they are uninterested in returning to the country in the event that President Maduro leaves.
"However, in a televised address today, he refrained from outlining his next moves. Supply risks are also rising in Russia,” the analysts said.
Some analysts argue that additional measures targeting Russian oil exports would pose a greater risk to global supply than the proposed U.S. blockade of Venezuelan tankers.
Adding to the uncertainty, Reuters reported Venezuela on Thursday authorised two unsanctioned very large crude carriers to depart for China, according to two sources familiar with the country’s oil export operations, suggesting flows to Asia could continue despite heightened geopolitical pressure.