Oil prices extended their decline for a third consecutive session during Friday's Asian trade as Washington’s push for a Russia-Ukraine peace deal raised expectations of increased global supply, while lingering uncertainty over the path of United States interest rates continued to weigh on investor sentiment.
By 3:30 pm AEDT (4:30 am GMT), Brent crude futures were down 89 cents, or 1.4%, at $62.49 per barrel. U.S. West Texas Intermediate crude slipped 30 cents, or 0.5%, to $59.14 per barrel.
The benchmarks lost 0.2% and 0.4% respectively in the previous session, and both are on track for weekly declines of around 3% and 3.4% amid persistent oversupply concerns.
Market sentiment soured this week as the U.S. intensified efforts to broker a peace plan between Russia and Ukraine to bring an end to the three-year conflict.
The diplomatic push comes even as sanctions on Russian oil majors Rosneft and Lukoil are scheduled to take effect on Friday. Lukoil has until 13 December to divest its substantial international holdings.
ANZ analysts commented in a note to clients: "The plan includes Russian demands for concessions that Kyiv has repeatedly said are unacceptable and that have so far hindered any breakthrough in efforts to reach a ceasefire.
"The market is also becoming sceptical that the latest restrictions on Russian oil companies Rosneft and Lukoil will be effective.
"Oil from Lukoil’s share of a field in Iraq is continuing to flow to global markets despite the threat of US sanctions, which go into effect on Friday."
A stronger U.S. dollar added further pressure to oil prices, making the commodity more expensive for buyers using other currencies.
The greenback was heading for its best week in more than a month on Friday, as traders increasingly bet that the Federal Reserve is unlikely to cut rates next month.
