Oil prices rose for a second day on Friday, set for their third weekly gain, on uncertainty about the future of supply from Venezuela and as Iranian unrest increases concerns about output there.
Brent futures rose 44 cents, or 0.71 per cent, to $62.43 per barrel at 0203 GMT, while US West Texas Intermediate (WTI) crude gained 39 cents, or 0.68 per cent, to $58.15.
Both benchmark prices climbed more than 3 per cent on Thursday, following two straight days of declines, and Brent is set to climb 2.7 per cent for the week, while WTI has gained 1.4 per cent for the week.
Prices have gained following US President Donald Trump’s seizure of Venezuela President Nicolas Maduro last week and his claims the US will control the South American country’s oil sector. Civil unrest in major Middle Eastern producer Iran and concerns about the spread of the Russia-Ukraine war to target Russian oil exports have also increased supply concerns.
“The price surge has been primarily due to Trump’s claim to control Venezuela’s oil export, which could see a price increase from previously discounted sales”, said Tina Teng, market strategist at Moomoo ANZ.
Oil major Chevron Corp, global trading houses Vitol and Trafigura, and other firms are competing for US government deals to export crude oil from Venezuela, according to sources familiar with the matter.
Trump has demanded that Venezuela give the US full access to its oil sector just days after it captured Maduro on Saturday. US officials have said Washington will control the country’s oil sales and revenues indefinitely.
The companies are contesting initial deals to market the up to 50 million barrels of oil that state-run oil company PDVSA has accumulated in inventories amid a severe oil embargo that has involved four tanker seizures, two of the sources said.
“The market will focus on the outcome in the coming days for how the Venezuelan oil in storage will be sold and delivered. Oversupply concerns could remain a concern if there is no limitation on sales,” said Teng.
Oil prices surged after several subdued days, partly correcting earlier neglect of geopolitical risks, Haitong Futures said in a report on Friday.
A nationwide internet blackout was reported in Iran on Thursday, internet monitoring group NetBlocks said, as protests over economic hardships continued around the country.
Iran’s President Masoud Pezeshkian warned domestic suppliers against hoarding or overpricing goods, state media reported on Thursday, as Tehran rolls out high-stakes subsidy reforms during nationwide protests against economic hardship.
However, global inventories are rising, and oversupply remains the main driver that could cap the gain, Haitong Futures said.
Unless risks around Iran escalate, the rebound is likely limited and hard to sustain, Haitong Futures added.
