Oil prices nudged higher on Friday after the U.S. put greater economic pressure on Venezuelan oil shipments and carried out airstrikes against Islamic State militants in Nigeria's Sokoto state, in coordination with the African country's authorities.
Brent crude futures rose 5 cents, or 0.1%, to $62.29 per barrel by 0606 GMT. U.S. West Texas Intermediate (WTI) crude was up 6 cents at $58.41.
Both Venezuela and Nigeria are major oil producers. While Nigeria's oilfields are mainly located in the south of the country, the airstrikes in the country's northwest added to geopolitical risks.
The White House ordered its military forces to focus on a "quarantine" of Venezuelan oil for at least the next two months, indicating Washington is currently more interested in using economic rather than military means to pressure Caracas.
"Due to the Christmas holiday closure, year-end market activity remained relatively subdued," said Tong Chuan, an analyst at Galaxy Futures. "Supply-side disruptions have become the primary driver of oil prices."
Oil prices, though, are on course for their steepest annual decline since 2020 as investors weigh U.S. economic growth and assess the risk of supply disruptions including in Venezuela.
Brent and WTI prices are on track to drop about 16% and 18%, respectively, this year, their steepest declines since the COVID pandemic hit oil demand, as supply is expected to outpace demand next year.
Oil shipments from Kazakhstan via the Caspian Pipeline are set to drop by a third in December to the lowest point since October 2024 after a Ukrainian drone attack damaged facilities at the main CPC export terminal, two market sources said on Wednesday.
The U.S. Energy Information Administration is due to release official inventory data on Monday, later than usual due to the Christmas holiday. The data should give a picture of demand in the world's biggest oil consumer. - Reuters
