By: Economy Middle east

Oil prices edged higher on Friday, supported by worries over potential supply disruptions in Venezuela. Despite the uptick, the market remained poised for a weekly decline as traders remained cautious amid growing optimism surrounding a possible Russia-Ukraine peace agreement.

By 6:05 GMT, Brent crude futures were up 52 cents, or 0.85 percent, at $61.80 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 52 cents, or 0.90 percent, to trade at $58.12 a barrel. Both benchmarks declined by about 1.5 percent on Thursday.

Oil prices lose 3 percent this week

The United States is gearing up to intercept additional vessels carrying Venezuelan oil after seizing a tanker earlier this week, a move that signals a further tightening of pressure on Venezuelan President Nicolás Maduro. The latest seizure has heightened market concerns over potential supply disruptions.

So far this week, oil prices have declined by more than 3 percent, underscoring the broader uncertainty weighing on global markets. Analysts say the recent downturn is driven by a risk-off mood among investors and a muted outlook for oil demand.

The Federal Reserve’s interest rate cut this week, coupled with remarks from Chair Jerome Powell that were interpreted as less hawkish than expected, has injected further uncertainty into financial markets regarding the path of U.S. monetary policy.

Global oil supply to outpace demand

Global oil supply is projected to outpace demand by 3.84 million barrels per day, according to the International Energy Agency’s latest monthly report. That surplus is slightly narrower than the 4.09 million bpd surplus estimated in November.

However, data released on Thursday by the Organization of the Petroleum Exporting Countries (OPEC) suggests that global oil supply will be largely in line with demand by 2026, an outlook that stands in sharp contrast to forecasts from the IEA and other agencies predicting a substantial oversupply.

In the United States, the Energy Information Administration reported a smaller-than-expected decline in crude inventories last week, alongside significant increases in fuel stockpiles.

Russia-Ukraine peace talks reach “critical moment”

Earlier this week, oil prices declined as the leaders of Britain, France and Germany spoke with U.S. President Donald Trump to review Washington’s latest push to advance peace talks aimed at ending the war in Ukraine, calling it a “critical moment” in the diplomatic process.

However, tensions escalated on Thursday when Ukrainian drones targeted an oil platform in the Caspian Sea for the first time, halting operations at the Lukoil-owned facility, according to an official from Ukraine’s Security Service.