Oil prices dipped in sluggish post-Christmas trading as investors assessed progress in long-stalled Ukraine peace talks, which could lead to a deal that would allow more Russian oil into a global market grappling with oversupply.

West Texas Intermediate crude fell slightly on Friday to around $58 a barrel, though still on track for its biggest weekly gain since late October, while Brent crude hovered below $62. Ukrainian President Volodymyr Zelenskiy said he hoped to meet with U.S. President Donald Trump in Florida on Sunday about ending Russia's war, adding that the framework of his country's deal with the U.S. was "almost ready" and that its signing would depend on the upcoming meeting.

In November, Trump said on social media that he would not meet with the leaders of both countries until a deal was at least in its final stages.

In another sign that negotiations are underway, the Kremlin has analyzed information about the peace plan presented to President Vladimir Putin by his envoy Kirill Dmitriev after a meeting in the US, Interfax reported, citing a Kremlin spokesman. Afterward, presidential aide Yuri Ushakov contacted US representatives to resume talks, according to the report.

Developments in Ukraine have erased previous gains from the US's partial blockade of Venezuelan crude shipments and Washington's military offensive against militant groups in Nigeria. Volumes also tend to decline after Christmas, with many traders on holiday, leading to excessive price fluctuations.

The White House has ordered commanders to concentrate for the next two months on quarantining Venezuelan oil, according to a person familiar with the matter. The person, who requested anonymity, said US forces are almost entirely focused on the blockade, rather than military options.

Meanwhile, Trump said the US was carrying out "powerful and deadly strikes" against ISIS targets in northwest Nigeria, with US Defense Secretary Pete Hegseth threatening further attacks. The OPEC member country produced about 1.5 million barrels per day in November, according to data from the group.

Despite geopolitical risks exerting downward pressure on prices, WTI crude remains on track for its biggest annual decline since 2020, down about 18%. This decline is driven by surplus expectations, with nearly all major global crude traders predicting a global oversupply next year after producers both inside and outside OPEC+ increased supply.

"Oil prices have been supported by strong US macro data and geopolitical instability over the past week," said Kirill Bakhtin, senior oil and gas analyst at BCS Financial Group, based in Moscow. "Since no new US statistical data is scheduled for the coming days, we expect a slight price decline going forward unless politics continues to influence."

Commodities, including crude oil, have also been supported by a weaker US currency, a shift that makes raw materials cheaper for most buyers. The Bloomberg Dollar Spot Index has fallen more than 0.8% this week.

WTI for February delivery was at $57.76 per barrel at 10:15 a.m. in New York, 1.01% lower than Wednesday's close. Brent crude for February delivery fell 1% to $61.57 per barrel. (alg)

Source: Bloomberg