Oil Steadies As Market Assesses Potential Disruption In Iran, Dealmaking For Venezuela

Oil prices steadied on Friday as concerns about potential disruption to Iran's output were offset by expectations of increased supply from Venezuela.

Brent futures gained 18 cents, or 0.3 per cent, to $62.17 per barrel by 1005 GMT, while US West Texas Intermediate (WTI) crude climbed 17 cents, or 0.3 per cent, to $57.93.

Both benchmarks climbed more than 3 per cent on Thursday, following two straight days of declines. For the week, Brent is on track to climb 2.3 per cent, while WTI has gained 1 per cent.

"Iran protests seem to be gathering momentum, leading the market to worry about disruptions," said Ole Hansen, head of commodity analysis at Saxo Bank.

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Civil unrest in major Middle Eastern producer Iran and concerns about the spread of the Russia-Ukraine war to Russian oil exports have increased supply concerns. Meanwhile, the White House is set to meet with oil companies and trading houses on Friday to discuss Venezuelan export deals.

Trump has demanded that Venezuela give the US full access to its oil sector just days after it captured the country's president Nicolas Maduro on Saturday. US officials have said Washington will control the country's oil sales and revenue indefinitely.

Oil major Chevron Corp, global trading houses Vitol and Trafigura, and other firms are competing for US government deals to market 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," said Tina Teng, market strategist at Moomoo ANZ. A nationwide internet blackout was reported in Iran on Thursday, internet monitoring group NetBlocks said, as protests in the capital Tehran and the major cities of Mashhad and Isfahan and other areas around the country over economic hardships continued. The Russian military said on Friday that it had fired its hypersonic Oreshnik missile at targets in Ukraine. The targets included energy infrastructure supporting Ukraine's military-industrial complex, the Russian defence ministry said in a statement.

Still, global oil inventories are rising, and oversupply remains the main driver that could cap gains, Haitong Futures said. Unless risks around Iran escalate, the rebound is likely limited and hard to sustain.

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