- Weak US demand and the easing of sanctions on Lukoil led to lower oil prices for the week.
- Geopolitical tensions in Yemen and Venezuela added supply risks but failed to outweigh bearish market sentiment.
Oil prices appear poised to decline for the week. Weak demand signals in the United States, a temporary easing of sanctions on Lukoil, and lower geopolitical risk have outweighed supply concerns in Yemen and Venezuela. Several regional tensions continue to threaten energy infrastructure. Even so, overall market sentiment has shifted towards caution. Softer US consumption and reduced fears of significant supply disruption now drive the market.
By early Friday afternoon, Brent crude traded at $62.99 per barrel. The price was down 0.4% from last Friday’s close of $63.24. West Texas Intermediate (WTI) stood at $59.30 per barrel. This marked a weekly decline of around 0.2%. These small losses came despite unrest in several producing regions. Traders have turned their attention to slowing US demand.
The latest report from the US Energy Information Administration (EIA) added more downward pressure. Commercial crude stocks increased by 600,000 barrels to 427.5 million barrels. Analysts had expected a draw of 1.9 million barrels. Strategic reserves also rose by 300,000 barrels to 411.7 million barrels. Petrol stocks jumped by 4.5 million barrels to 214.4 million barrels. US crude production inched up by 1,000 barrels per day to 13.815 million barrels per day. These figures suggest that supply remains strong while demand weakens.
Market sentiment softened further after Washington issued a waiver for Lukoil. The decision allows the company to operate its overseas fuel stations until 29 April 2026. The Office of Foreign Assets Control introduced the waiver to ease earlier sanctions on Rosneft, Lukoil, and related firms. This move alleviated concerns about immediate supply disruptions.
Diplomatic signals also influenced prices. President Vladimir Putin told India Today that the Ukraine war would end once Russia achieved its pre-war goals. He described recent talks with US envoys as “very useful”. His comments lowered the geopolitical risk premium that often supports oil prices.
Instability in Yemen remains a concern. UAE-backed Southern Transitional Council forces seized key towns and oilfields in Hadhramaut province. Yemen’s Second Military Region confirmed that the STC took positions from the “Tribal Alliance” after repelling attacks.
Tensions also rose in Venezuela. President Donald Trump ordered the closure of US airspace to Venezuelan aircraft. The move followed earlier naval deployments in the vicinity of the country. Analysts still see a whole conflict as unlikely. However, more US pressure could hit Venezuela’s oil output and exports.
Drone attacks on energy assets in Russia and Ukraine added brief support to prices. They highlighted ongoing risks to supply chains. Despite this, the main drivers of the week remained weak US demand and the easing of restrictions on Lukoil. As a result, crude prices continued to trend lower.