West Texas Intermediate crude was on track to finish the week higher on Friday, buoyed by mounting confidence in a forthcoming Federal Reserve rate cut, rising geopolitical strains between the U.S. and Venezuela, and stalled diplomatic efforts in Moscow. Still, both major oil benchmarks eased slightly from Thursday’s levels.
By 07:45 GMT, Brent crude edged down 3 cents, or 0.05%, to $63.23 a barrel, leaving it largely unchanged for the week. U.S. WTI slid 10 cents, or 0.17%, to $59.57, though it remained up roughly 1.7% for the week — marking its second consecutive weekly gain.
“The market weighs the impact of lower CPC exports and some positive news on the demand side, with a possible Fed rate cut,” said Anh Pham, a senior research specialist at LSEG, pointing to reduced Kazakh flows after a Ukrainian drone strike on the Caspian Pipeline Consortium’s Black Sea terminal.
Both crude contracts had settled about 1% higher in the previous session.
A Reuters poll conducted from November 28 to December 4 showed that 82% of surveyed economists expect a 25-basis-point cut at next week’s Fed meeting — a move that could bolster economic activity and fuel stronger oil consumption.
“Looking ahead, supply factors remain in focus. A peace deal with Russia would bring more barrels to the market and likely push prices down,” Pham said.
“On the other hand, any geopolitical escalation will drive prices higher. OPEC+ has agreed to keep production steady until early next year, so it adds some support for prices too,” he added.
Meanwhile, traders remain alert to increasing tensions in Latin America after President Donald Trump warned that the U.S. would begin taking action on Venezuelan soil “very soon” to target drug trafficking groups. According to Rystad Energy, such an operation could jeopardize Venezuela’s 1.1 million barrels per day of crude output, most of which goes to China.
Prices also found support from the lack of progress in high-level talks between Washington and Moscow, which failed to secure any agreement that might have allowed more Russian oil to return to global markets.
These developments offset concerns about a growing supply glut. On Thursday, a document reviewed by Reuters showed that Saudi Arabia had slashed January Arab Light crude prices to Asia to their lowest level in five years in response to oversupply.