Oil prices reversed earlier losses on Friday as fears that escalating conflict in Libya could disrupt oil supplies from the OPEC member outweighed trade concerns.
Brent crude futures rose 34 cents to $69.74 a barrel by 1405 GMT, having touched $70.03 in the previous session, its highest since Nov. 12.
U.S. West Texas Intermediate (WTI) crude rose by 49 cents to $62.59, having hit their highest since Nov. 7 on Wednesday at $62.99.
Brent and WTI are on track for their second and fifth consecutive weeks of gains respectively, capped by concerns that an economic slowdown could dent fuel consumption.
“The geopolitics around Libya and Venezuela, alongside the possible reflation of risk appetite on positive U.S.-China trade talks, may well pull the market out of its morning doldrums,” Harry Tchilinguirian, global oil strategist at BNP Paribas, told the Reuters Global Oil Forum.
Eastern Libyan commander Khalifa Haftar ordered his troops on Thursday to march on Tripoli, escalating conflict with the internationally recognized government.
Any potential oil outages in Libya would “noticeably increase the pressure on Saudi Arabia to open up the oil tap again, as it did in the autumn”, Commerzbank said in a note.
The Organization of the Petroleum Exporting Countries and producer allies such as Russia agreed to cut output by 1.2 million barrels per day (bpd) this year to prop up prices.
Venezuela’s deputy foreign minister on Thursday said he did not rule out that more Russian military personnel could arrive in Venezuela under agreements already concluded between the two countries.
Lingering concerns over U.S.-China trade relations capped further gains on oil prices.
The United States and China, the world’s two biggest oil consumers, could be close to ending their trade dispute, though some hurdles remain.
U.S. President Donald Trump on Thursday said the two sides were “very close to making a deal”, though the United States remains hesitant to lift its tariffs on $250 billion worth of goods.
Somewhat undermining the OPEC-led effort to prop up the market is surging U.S. oil production, which rose to a record 12.2 million bpd last week, official data showed.