Oil prices fell on Friday (December 19th) and are expected to post a second straight weekly decline as potential oversupply and the prospect of a Russia-Ukraine peace deal outweigh concerns over disruptions caused by a Venezuelan oil tanker blockade.

Brent crude futures fell 17 cents, or 0.28%, to $59.65 a barrel at 0915 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 31 cents, or 0.55%, to $55.84.

On a weekly basis, Brent and WTI benchmarks fell 2.4% and 2.8%, respectively. Analysts widely project a global oil oversupply next year, driven by increased production from the OPEC+ producer group as well as from the United States and other producers.

"That prices remain at these low levels suggests that the market is currently awash with oil," said Ole Hansen, head of commodity strategy at Saxo Bank. "There's enough oil to mitigate any disruption."

Uncertainty about how the U.S. will enforce President Donald Trump's intention to block sanctioned tankers from entering and leaving Venezuela dampened geopolitical risk premiums and weighed on oil prices on Friday, said IG analyst Tony Sycamore.

Venezuela, which pumps about 1% of global oil supply, on Thursday allowed two unsanctioned cargoes to sail to China, two sources familiar with Venezuela's oil export operations said. Optimism over a potential U.S.-led Ukraine peace deal also eased supply risk concerns, Sycamore said.

However, Bank of America analysts said they expect lower oil prices to curb supply, which could prevent a free fall. (alg)

Source: Reuters.com