Middle East Causes Weekly Gain For Oil, But Market Needs "Major Bullish Headlines"

Meanwhile, Venezuela may become another source of geopolitical tension: File Image/Pixabay

Exhibiting some consistency in sentiment, oil notched a daily and weekly gain based on increasing concerns of supply impact stemming due to the Israel/Hamas war, and bolstered by significant U.S. refinery downtime.

Brent settled up 56 cents at $82.19 per barrel and West Texas Intermediate settled up 62 cents at $76.84 per barrel after it was learned that Israel bombarded Gaza's southern city of Rafah on the Egyptian border, and the U.S. killed a senior militant leader in a drone strike in Baghdad, stoking tensions in the major oil producing nation of Iraq.

For the week, crude earned a 6 percent rise compared to a 7 percent loss for the previous week.

Jim Ritterbusch, president of Ritterbusch and Associates, warned that trading patterns of the last two weeks could be the norm for the time being: "We believe that this type of week-to-week wide price swings will further characterise the crude markets through the rest of this month short of major bullish headlines out of the Mideast that could force adjustment in global oil balances."

Still, Bloomberg noted that Brent's prompt spread was pushed to its biggest daily gain since October partly due to "buying in a key North Sea pricing period, indicating a stronger crude market in the region."

Other analysts on Friday found time to observe activities in Russia, where more crude in February was reportedly exported than planned under a deal struck by the Organization of the Petroleum Exporting Countries (OPEC).

Carsten Fritsch, an analyst at Commerzbank, said, "Proof still needs to be provided that Russia is able to cut oil exports sufficiently even without weather-related constraints."

Meanwhile, new tensions likely to kindle traders' concerns broke out in Venezuela, which is sending troops to its border with Guyana as part on an ongoing bid to annex an area known as Essequibo - the site of massive discoveries and new production by Exxon and partners -
and conduct exploration and exploitation of oil, gas, and mines.

Venezuela does not recognize a court ruling that Essequibo is part of Guyana, and Venezuelan president Nicolas Maduro has vowed a "forceful response" in the area "that rightfully belongs to Venezuela; the Essequibo is ours."