- Oil heading for largest annual decline since 2020
- US targets Islamic State militants in Nigeria, no direct impact on oil infrastructure
- Venezuelan oil under US economic pressure
LONDON, Dec 26 (Reuters) - Oil prices were stable on Friday as investors weighed potential supply risks from developing geopolitical tensions in a thinly-attended post-Christmas session, after the U.S. carried out airstrikes against Islamic State militants in Nigeria and added greater economic pressure on Venezuelan oil.
Brent crude futures rose 12 cents, or 0.19%, to $62.36 per barrel by 1016 GMT. U.S. West Texas Intermediate (WTI) crude was up 19 cents, or 0.33%, at $58.54.
Oil prices are on course for their steepest annual decline since 2020, as rising oil output from both the OPEC+ group and non-OPEC states has raised concerns of a market in surplus heading into next year.
The U.S. on Thursday carried out a strike against Islamic State militants in northwest Nigeria's Sokoto state in coordination with the Nigerian government, U.S. President Donald Trump said.
"Nigerian strikes touted by Trump are targeting Islamic State and not specifically impacting any crude pipelines or oil terminals. Thus traders are staying on the sidelines in this thin liquidity market on Boxing Day," said June Goh, senior oil market analyst at Sparta Commodities.
Major oil producer Nigeria's oilfields and export infrastructure are mainly located in the south of the country.
The White House ordered its military forces to focus on a "quarantine" of Venezuelan oil for at least the next two months, indicating Washington is currently more interested in using economic rather than military means to pressure Caracas.
"Due to the Christmas holiday closure, year-end market activity remained relatively subdued," said Tong Chuan, an analyst at Galaxy Futures. "Supply-side disruptions have become the primary driver of oil prices."
Investors will also be watching for developments in the Russia-Ukraine peace process and the possible impact on future oil prices, as a peace agreement could lead to the removal of international sanctions against Russia's oil sector.
Ukraine's President Volodymyr Zelenskiy said on Friday that a lot can be decided before the New Year and that he hopes to meet with Donald Trump soon.
Axios said Trump will meet Zelenskiy on Sunday at Mar-a-Lago, citing a Ukrainian official.
Reuters could not immediately verify the statement.
Meanwhile, Russian President Vladimir Putin indicated Russia might be open to a territory swap in a briefing to top Russian business leaders, the Kommersant newspaper reported.
Reporting by Robert Harvey in London and Sudarshan Varadhan in Singapore; Editing by Thomas Derpinghaus and Muralikumar Anantharaman
Source: Reuters