Oil prices edged up on Friday, as investors weighed a tight prompt market against a potential large surplus this year, according to the International Energy Agency, while U.S. tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures were up 40 cents, or 0.58%, at $69.04 a barrel as of 1027 GMT. U.S. West Texas Intermediate crude ticked up 45 cents, or 0.68%, to $67.02 a barrel.

At those levels, Brent was headed for a 1.1% gain on the week, while WTI was little changed against last week's close.

The IEA on Friday said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation.

Front-month September Brent contracts were trading at a $1.10 premium to October futures at 1027 GMT.

"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.

Prompt tightness notwithstanding, the IEA also boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank (ETR:CBKG) analysts said in a note.

One other sign of robust prompt oil demand was the prospect of Saudi Arabia shipping about 51 million barrels of crude oil in August to China, the biggest such shipment in over two years.

Longer term, however, rival forecasting agency OPEC cut its forecasts for global oil demand in 2026 to 2029 because of slowing Chinese demand, the group said in its 2025 World Oil Outlook published on Thursday.

Both benchmark futures contracts lost more than 2% on Thursday as investors worried about the impact of Trump's evolving tariff policy on global economic growth and oil demand.

"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.

Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.

The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package.

Source: Investing.com