Oil prices moved higher on Friday, but remained on track for a second consecutive weekly decline as persistent concerns over a global supply glut continued to weigh on market sentiment. Ongoing geopolitical risks provided limited support, but were not enough to offset oversupply fears.
At 20:32 ET, February Brent crude futures rose 0.6% to $60.18 per barrel, while West Texas Intermediate crude gained 0.7% to $56.40 per barrel. Despite the daily gains, both benchmarks were set to post weekly losses of just under 2%.
Oversupply concerns keep oil under pressure
Oil markets have remained under pressure amid expectations that global supply will continue to exceed demand well into 2026. Rising production from non-OPEC producers, combined with slower demand growth across major economies, has kept global inventories well supplied.
OPEC and its allies have gradually raised output this year as earlier voluntary production cuts were rolled back, adding more barrels to an already saturated market.
Weak demand from China has further intensified concerns. Slower growth in industrial activity and consumer spending in the world’s largest crude importer has limited fuel consumption, reducing support for prices.
Recent data showing ample crude and refined fuel stockpiles in the United States and parts of Asia has reinforced the view that global oil markets remain well cushioned against potential supply disruptions.
Traders monitor Russia and Venezuela risks
Despite the supply glut narrative, investors continue to closely track geopolitical risks that could tighten markets. One major focus remains the possibility of additional U.S. sanctions on Russia’s energy sector if diplomatic efforts to end the war in Ukraine fail.
Harsher restrictions targeting Russian crude exports or shipping routes could restrict global supplies, although the timing and scope of any such measures remain uncertain.
European Union leaders recently announced plans to raise funds to support Ukraine’s defense over the next two years, opting not to immediately use frozen Russian assets as loan collateral. They stated that those assets could still be used for repayment if Russia fails to meet potential war reparation obligations.
Vladimir Putin has shown no sign of compromise, maintaining demands that Ukraine abandon its NATO ambitions and withdraw from regions claimed by Russia. Kyiv has rejected these terms, refusing to surrender territory not fully captured by Russian forces.
Traders are also assessing risks tied to Venezuelan oil exports following tighter U.S. enforcement actions. Growing concerns over a possible blockade of Venezuelan oil tankers have raised fears of supply disruptions to global markets.
Venezuela has already struggled to sustain stable export levels under existing sanctions, and stricter enforcement could further limit its ability to ship crude internationally.
