DTN Oil Update
Oil Posts Biggest Weekly Rise in 3 Months
SECAUCUS, N.J. (DTN) -- Oil futures settled higher Friday with their biggest weekly advance in three months as market participants covered short positions amid fresh buying in crude fueled by geopolitical risks.
NYMEX WTI futures for February delivery settled up $1.36, or 2.4%, at $59.12 bbl. The ICE Brent contract for March climbed $1.27, or 2%, to $63.26. For the week, WTI rose 3% while Brent showed an advance of nearly 5% for their largest weekly advances since the week ended October 17.
Downstream, NYMEX ULSD futures for February delivery edged higher by $0.0148 to $2.1343 gallon while front-month RBOB futures moved up by $0.0209 to $1.7821 gallon.
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The U.S. Dollar Index rose 0.182 points to 98.87 against a basket of foreign currencies.
Friday marked a second consecutive day of rises in oil prices after a prior two-day tumble on prospects of higher supply from Venezuela.
The pivot came after the White House approved secondary sanctions on buyers of Russian oil and a weekly draw in U.S. crude inventories. The market was also lifted by protests across Iran that challenged its regime, raising supply risk for OPEC's fourth-largest member which produces some 3.2 million barrels per day (bpd).
"There's been a lot of covering the past 48 hours by people who needed to take profit on their short positions and that's come on top of new buying by those watching the situation in Iran," an oil trader told DTN. "But no mistakes: We are still in a glut situation and the market could tumble again in the coming week."
Reinforcing that notion, a Goldman Sachs client survey from this week showed investor bearishness on oil had reached levels not seen since the Trump administration first announced inordinate tariff hikes on almost all U.S. trading partners in April last year.
That survey aside, the International Energy Agency has predicted that last year's global oil surplus could double to 3.8 million bpd this year.
On the Venezuelan front, U.S. President Donald Trump was due to meet heads of major oil companies whom he said were prepared to invest a total of some $100 billion to boost the South American country's crude output.
The White House has asserted its control over Venezuela since U.S. military forces captured that country's president Nicolas Maduro last weekend. Venezuela's oil production used to be as high as 3.5 million bpd before falling to around 1 million bpd or less now, according to OPEC.