Oil prices climb fuelled by Venezuelan supply disruption concerns

Oil prices ticked higher on Friday morning, fuelled by concerns about disruption to Venezuelan supply.

Brent crude (BZ=F) futures advanced 0.4% to $61.54 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) climbed 0.6% to $57.93 a barrel.

Donald Trump confirmed on Wednesday that the US had seized an oil tanker off the coast of Venezuela, as tensions ramped up between Washington and Caracas.

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Reuters reported on Friday that the US is preparing to intercept more ships transporting Venezuelan oil.

This raised concerns of a disruption to oil supply on the market. Looking further ahead, Barclays (BARC.L) energy analyst Amarpreet Singh said in a note, published on Thursday, that the bank expected Brent prices to average $65 a barrel next year.

“We expect a 1.9 mb/d [million barrels per day] surplus next year, but inventories remain low and builds continue to surprise to the downside,” he said. “In addition, spare capacity is low and shrinking, and geopolitical tensions continue to pose asymmetric upside risks to prices.”

Gold prices rose on Friday morning, as an interest rate cut by the US Federal Reserve continued to support the precious metal.

Gold futures (GC=F) edged 0.4% higher to $4,328.50 per ounce at the time of writing on Friday morning, while spot gold gained 0.5% at $4,303.12 an ounce.

The Fed cut interest rates by a quarter percentage point, as expected, on Wednesday while projecting one more cut for 2026. The central bank voted in a split decision to trim its benchmark interest rate to a range of 3.5% to 3.75%.

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Dan Coatsworth, head of markets at AJ Bell (AJB.L), said: “Hot on the heels of a US interest rate cut were jobless claims figures that came in higher than expected [on Thursday].

“The Fed is watching the labour market closely for signs of weakness and any notable deterioration would strengthen the argument for more interest rate cuts down the line.”

Lower interest rates tend to boost the appeal of holding bullion, as a non-yielding asset, helping drive gold prices higher.

The pound edged 0.1% lower against the dollar (GBPUSD=X), to trade at $1.3376, on Friday as investors digested data showing an unexpected contraction in UK economic growth.

The UK’s gross domestic product (GDP) declined by 0.1% month-on-month in October, according to data released by the Office for National Statistics (ONS) on Friday. That compared to City forecasts of a 0.1% expansion and followed a 0.1% fall in September and flat output in August.

Sanjay Raja, chief UK economist at Deutsche Bank (DBK.DE), said: “Seasonal weakness continues. Indeed, we seem to be following the same seasonal trend as we saw in years past where Q4 GDP tends to be a little weaker than the rest of the year.

“Moreover, budget uncertainty continues to weigh on the UK’s growth engine – the services sector, something we think could continue into November.”

“The good news is that we expect the UK economy to shake off much of the uncertainty heading into the new year, pushing up by 0.5% q-o-q in Q1-26,” he said. “And annual growth we expect will stay broadly healthy at 1.2%.”

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However, Raja added that “with political risks on the rise, we see more downside risks to 2026 growth projection”.

The pound was little changed against the euro (GBPEUR=X) on Friday morning, trading at €1.1398 at the time of writing.

More broadly, the FTSE 100 (^FTSE) advanced 0.5% in early European trading, to 9,746 points, at the time of writing. For more details on market movements check our live coverage here.

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