By Robert Harvey
LONDON, Jan 16 (Reuters) – Oil prices rose slightly on Friday as supply risks remained in focus despite the receding likelihood of a U.S. military strike against Iran.
Brent crude gained 79 cents, or 1.24%, to $64.55 a barrel by 1151 GMT, on course for a fourth consecutive weekly gain.
U.S. West Texas Intermediate rose 74 cents, or 1.25%, to $59.93.
Both benchmarks hit multi-month highs this week after protests flared up in Iran and U.S. President Donald Trump signalled the potential for military strikes.
Late on Thursday, Trump said that Tehran’s crackdown on the protesters was easing, allaying worries about possible military action that could disrupt oil supplies.
“Above all, there are worries about a possible blockade of the Strait of Hormuz by Iran in the event of an escalation, through which around a quarter of seaborne oil supplies flow,” Commerzbank analysts said in a note.
“Should there be signs of a sustained easing on this front, developments in Venezuela are likely to return to the spotlight, with oil that was recently sanctioned or blocked gradually flowing onto the world market.”
Meanwhile, analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
“Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply,” said Phillip Nova analyst Priyanka Sachdeva.
“Unless we see a genuine revival in Chinese demand or a meaningful bottleneck in physical barrel flows, oil looks range-bound, with Brent broadly hovering between $57 and $67.”
(Reporting by Robert Harvey in London, Helen Clark in Perth and Trixie Yap in SingaporeEditing by David Goodman)
