Oil prices slid by more than 2 per cent on Friday but still managed to record their first weekly gain in three weeks as investors digested supply glut concerns and looked ahead to a key meeting between the US and Ukraine that may broker a peace deal with Russia.
Crude was trading higher earlier in the day and was heading for its largest weekly gain since October after the US carried out military strikes in Opec member Nigeria, a major oil producer. Geopolitical tension between the US and Venezuela has also stoked supply concerns.
But the energy commodity reversed course after Ukrainian President Volodymyr Zelenskyy said he would meet US President Donald Trump in Florida on Sunday, part of a long-running saga intended to finally end years of hostilities between Ukraine and Russia.
Brent, the benchmark for two-thirds of the world's oil, retreated 2.57 per cent to close at $60.64 a barrel. West Texas Intermediate, the gauge that tracks US crude, slipped 2.76 per cent to $56.74 per barrel.
From last Friday's close, Brent added 0.28 per cent, while WTI gained 0.25 per cent. Year-to-date, the benchmarks have given up about 19 per cent and 21 per cent, respectively.
The US air strikes in Nigeria are also "raising short-term supply risks for the commodity, overshadowing concerns about an oversupplied market", said Vijay Valecha, chief investment officer at Century Financial.
The US on carried out military strikes against ISIS militants in north-west Nigeria, Mr Trump said on X, accusing the group of attacking Christians in the region.
“The Department of War executed numerous perfect strikes, as only the United States is capable of doing,” Mr Trump said.
There have been no reports of obstructions to oil flows from Nigeria, but these strikes raise potential supply concerns. US Defence Secretary Pete Hegseth said on X that there was “more to come”.
Nigeria produced about 1.5 million barrels per day last month, according to Opec's monthly report. Its oilfields are mainly concentrated in the Niger Delta located in the south of the country.
Meanwhile, the continuing geopolitical tension between the US and Venezuela, another Opec member, are also affecting oil prices. Last week, the US ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, putting oil flowing out of the South American country at risk.
The US has seized two oil tankers off the Venezuelan coast this month as the Trump administration continues to put pressure on President Nicolas Maduro and his government.
Mr Trump said the US will keep or sell the crude it has seized. The US is also pursuing a third Venezuelan oil tanker.
Venezuela produces 1.1 million barrels of oil a day, with most of it going to China and India, according to Rystad Energy analysis.
Oil prices are on course for their steepest annual decline since 2020 amid oversupply concerns as Opec+ boosts production amid plans to regain market share.
The US economy also grew at a surprisingly strong 4.3 per cent annualised rate in the third quarter, the fastest expansion in two years, supporting oil prices.
