Oil prices dip after surge, remain on track for weekly gain amid supply fears

Russia was the world's second-biggest crude oil producer in 2024 after the US, according to US energy data.

US crude futures eased in early trade on Friday, trimming part of the previous day's surge but remaining on track for a weekly gain, as fresh U.S. sanctions on Russia's two biggest oil companies over the war in Ukraine fuelled supply concerns.

Brent crude futures fell 17 cents, or 0.3%, to $65.82 by 0024 GMT. U.S. West Texas Intermediate crude futures were down 17 cents, or 0.3%, at $61.62.

Both benchmarks jumped more than 5% on Thursday and were set for about a 7% weekly gain, the biggest since mid-June.

Russian President Vladimir Putin remained defiant on Thursday after US President Donald Trump hit Russia's Rosneft and Lukoil with sanctions to pressure the Kremlin leader to end the war in Ukraine. Rosneft and Lukoil together account for more than 5% of global oil output.

The US sanctions prompted Chinese state oil majors to suspend Russian oil purchases in the short term, trade sources told Reuters. Refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut their crude imports, according to industry sources.

"Buying driven by supply tightness concerns over U.S. sanctions on Russia has subsided," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

"With OPEC holding spare capacity, a one-sided rally is unlikely," he said, predicting that WTI is expected to trade within about $5 above or below $65.

Kuwait's oil minister said that the Organization of the Petroleum Exporting Countries would be ready to offset any shortage in the market by rolling back output cuts.

The US said it was prepared to take further action, while Putin derided the sanctions as an unfriendly act, saying they would not significantly affect the Russian economy and talked up Russia's importance to the global market.

European Union countries also approved a 19th package of sanctions on Moscow that included a ban on Russian liquefied natural gas imports, while Britain hit Rosneft and Lukoil with sanctions last week.

Russia was the world's second-biggest crude oil producer in 2024 after the US, according to US energy data.

Investors are also focusing on a planned meeting between Trump and Chinese President Xi Jinping next week.

Trade tensions between Washington and Beijing have been escalating, marked by tit-for-tat retaliatory measures announced by both sides. Confirmation that the two leaders would meet next week appeared to ease those tensions.