Oil prices paused their run of gains on Wednesday, slipping after four days of increases, as Venezuela resumed exports, but fears of Iranian supply disruptions following deadly civil unrest in the major Middle Eastern producer loom over the market.
Brent futures were trading 9 cents down, or 0.14 per cent lower, at $65.38 a barrel at 0207 GMT. US West Texas Intermediate crude was down 12 cents, or 0.20 per cent, at $61.03 a barrel.
Brent futures closed 2.5 per cent higher on Tuesday while WTI gained 2.8 per cent amid a 9.2 per cent surge in prices for both contracts over the past four trading sessions as the mounting protests in Iran have increased fears of supply disruptions from the fourth-largest OPEC producer.
US President Donald Trump on Tuesday urged Iranians to keep protesting and said help was on the way without specifying what aid would be provided.
“Protests in Iran risk tightening global oil balances through near-term supply losses, but mainly through rising geopolitical risk premium,” analysts at Citi said in a note, in which they raised their outlook for Brent over the next three months to $70 a barrel.
The Citi analysts noted that so far the protests have not spread to the main Iranian oil producing areas, which has limited the effect on actual supply.
“Current risks are skewed toward political and logistical frictions rather than direct outages, keeping the impact on Iranian crude supply and export flows contained,” they said.
Offsetting the Iranian concerns, Venezuela, a founding member of the Organization of Petroleum Exporting Countries, has begun reversing oil production cuts made under a US oil embargo as crude exports were also resuming, three sources said.
Two supertankers departed Venezuelan waters on Monday with about 1.8 million barrels each of crude in what may be the first shipments of a 50-million-barrel supply deal between Caracas and Washington to get exports moving again in the wake of the US capture of Venezuelan President Nicolas Maduro.
Still, oil market fundamentals suggest a much looser supply and demand situation even amid the geopolitical issues.
That was reinforced by US inventory data released late on Tuesday.
Crude stocks in the US, the world’s biggest oil consumer, rose by 5.23 million barrels in the week ended January 9, the American Petroleum Institute reported, according to market sources.
The sources also said the API data showed gasoline inventories rose by 8.23 million barrels, while distillate inventories rose by 4.34 million barrels from a week earlier.
Stockpile data from the US Energy Information Administration will be released later on Wednesday.
A Reuters poll showed on Tuesday US crude oil stockpiles were expected to have fallen last week, while gasoline and distillate inventories likely rose.
