RoydadNaft –  Oil prices declined in early trading on Friday, December 19, and are set to close lower for the second consecutive week. This drop comes amid rising prospects of a Russia-Ukraine peace agreement, which has offset concerns over supply disruptions from the blockade of Venezuelan oil tankers.

According to Roydad Naft, Brent futures fell 12 cents or 0.2% to $59.70. U.S. WTI futures also dropped 16 cents or 0.3% to $55.99. Brent declined 2.3% for the week, while WTI fell 2.5%.

U.S. President Donald Trump said on Thursday that negotiations to end the Ukraine war are “getting close to something,” with talks continuing ahead of meetings between U.S. officials and Russians this weekend.

Regarding Venezuela, details of the blockade on sanctioned oil tankers remain unclear, and the country has granted permission for two large unsanctioned tankers to sail to China. Analysts believe potential actions against Russian oil pose a greater supply risk than the Venezuelan tanker blockade.

IG analyst Tony Sycamore said: “Uncertainty over implementation details and optimism about a potential U.S.-led peace agreement have reduced global supply concerns and tempered the geopolitical risk premium.”

Bank of America analysts predict that lower oil prices will curb supply and prevent a freefall in prices.

Sycamore added: “A rally from current levels that breaks the $56.70–$56.90 resistance would indicate that this week’s drop to the low of $54.98 was a false breakdown. Conversely, a break below $54.98–$54.90 would revive the downtrend and activate the psychological target of $50.”