Market News

(Bloomberg) — Oil edged higher at the end of a volatile week, as traders weighed tensions in Iran and positive sentiment in wider markets.

Brent (BZ=F) traded above $64 a barrel after plunging 4.2% on Thursday, the most since June. Israel’s Prime Minister Benjamin Netanyahu asked President Donald Trump to postpone plans for an attack on Iran, the New York Times reported. That’s reduced the chance of an immediate US response to violent protests in the Islamic Republic, which could have led to disruptions to oil production or shipping.

Nevertheless, Washington is boosting its military presence in the Middle East. At least one aircraft carrier is moving into the region and other military assets are expected to be shifted there in the coming days and weeks, Fox News reported, citing military sources. Traders have in the past covered bearish wagers ahead of the weekend in periods of heightened geopolitical risks.

“While the risk of imminent intervention from the US against Iran has subsided, it’s pretty clear that the risk is still present, which should keep the market on its toes in the short term,” said Warren Patterson, head of commodities strategy at ING Groep NV. “However, the longer this goes on without a US response, the risk premium will continue to evaporate, allowing more bearish fundamentals to take center stage.”

 

Oil is set to end the week with a small gain after surging from Jan. 8 on concern the US would target OPEC’s fourth-largest producer, threatening more than 3 million barrels a day of production. Disruption to Kazakh exports from the Black Sea, short-term tightness in the North Sea and a host of financial flows from options markets to commodity index rebalancing have also helped lift an oil market coming off its biggest drop since 2020 on rising supplies.

In the Caribbean, the US is increasing its pressure on the use of sanctioned ships, with forces seizing a sixth oil tanker near Venezuela. Still, Trafigura Group is set to discharge its first oil cargo from the Latin American nation in storage facilities in Curacao as part of US government efforts to market the barrels.