Oil Rises, But the Iran Drama Isn't Over Yet
Oil prices closed slightly higher on Friday (January 16th), as some market participants closed short positions ahead of the long US holiday and maintained a "risk premium" on the ongoing situation in Iran. Brent closed at $64.13/barrel (+0.58%), while WTI closed at $59.44/barrel (+0.42%).
This strengthening followed highly volatile movements throughout the week. Previously, oil had surged to multi-month highs on concerns about potential escalation, but was hit hard on Thursday, falling more than 4% when rhetoric regarding a US attack on Iran took on a more "wait-and-see" tone.
Although the likelihood of a direct attack appears slim for now, the market has not completely calmed down. Attention remains focused on the risk of supply disruptions and shipping routes, especially if tensions escalate quickly.
Meanwhile, the Venezuelan factor is also starting to come back into the picture. Market participants believe that the previously feared additional supply has not yet "flowed rapidly," giving prices room to hold up when downward pressure arises.
However, for the longer term, many players remain cautious: global supply is seen as likely to be loose this year, so gains could potentially be restrained if there are no real physical disruptions or significant surges in demand.
Looking ahead, the short-term direction of oil prices will still be largely determined by geopolitical headlines and risk-on/risk-off sentiment. As long as there is no new escalation, the "war premium" risks slowly eroding—and the market will refocus on supply-demand fundamentals. (yds)
Source: Newsmaker.id
