Oil rises 3% this week - and not just because of Venezuela
Control over Venezuela's oil has been in the spotlight all week, but developments in Iran are key to crude's latest rise
Threats to Iran's oil production provided a boost to oil prices Friday.
U.S. oil prices on Friday settled at their highest level since early December, up by more than 3% for the week.
Analysts cited threats to Iran's oil production as the biggest reason for the rise, even as traders continue to closely watch developments in Venezuela.
For now, oil prices have found support from unrest in Iran, and from Israeli threats of potential military strikes on Iranian oil infrastructure, which would impact supplies, said Tyler Richey, co-editor at Sevens Report Research.
Tehran on Thursday saw its biggest antigovernment protests since the unrest started in late December. Such protests haven't been seen at such a scale in the capital since 2022, during an uprising over the death of a young woman detained for not wearing a headscarf, according to the Wall Street Journal.
Venezuela continues to be in the spotlight, and the near-term impact of the situation there is actually also bullish for prices from a supply standpoint, Richey told MarketWatch.
The state-owned Petróleos de Venezuela, or PDVSA, has reportedly shut down an unknown amount of oil-well production due to a lack of sufficient physical oil storage and still largely locked-down port operations, he said.
That eventually could pressure prices lower, as Venezuela has nowhere to put the barrels still flowing out of the ground - leaving it in a very similar debacle to that which the U.S. found itself in back in April 2020, when storage hit capacity and some operators were forced to pay someone to take delivery of their oil, Richey noted. That might be an area where President Trump may want U.S. oil companies to step in with help.
Reports indicating more Venezuelan oil could be hitting the global market failed this week to pressure U.Sand global oil prices lower. U.S. benchmark West Texas Intermediate crude saw its February contract climb 2.4% to settle at $59.12 a barrel on the New York Mercantile Exchange on Friday; that was the highest finish since Dec. 5, according to Dow Jones Market Data. Global benchmark Brent crude for March delivery added 2.2% to $63.34 on ICE Futures Europe.
Trump earlier this week said Venezuela would send up to 50 million barrels of its oil to the U.S. to be sold at market prices.
Source: Marketwatch
