Oil on Friday closed higher for the third day in a row as a deal to reopen the US government eased investor fears while political turmoil in Venezuela roiled one of the world’s biggest suppliers of heavy crude.
Futures in New York rose 1.1 percent, gaining steam on reports that US President Donald Trump agreed to a three-week pause in the government shutdown to pursue bordersecurity talks with Democrats.
In Caracas, Venezuelan President Nicolas Maduro and Juan Guaido, the opposition leader, gave dueling speeches.
“There’s some optimism now that the government shutdown, at least temporarily, may be behind us,” said Brian Kessens, who helps manage US$16 billion in energy assets at Tortoise Capital Advisers LLC in Leawood, Kansas. “That’s got markets feeling a little bit better.”
West Texas Intermediate (WTI) crude for March delivery climbed US$0.56 to US$53.69 a barrel at the close of trading on the New York Mercantile Exchange.
Brent for March settlement advanced US$0.55 to US$61.64 on the London-based ICE Futures Europe exchange, and traded at a US$7.95 premium to WTI.
Despite those gains, both grades finished lower for the week, enduring their first weekly loss this year, with WTI slipping 0.2 percent and Brent losing 1.7 percent.
Prices leaped about 20 percent to start the year, buoyed by output cuts by OPEC, Russia and other major producers.
However, the rally has faltered amid shaky economic forecasts and record production of US crude.
Troubles in Venezuela, owner of the world’s biggest oil reserves, provided a boost as the week wound to a close.
The Latin American nation could see crude production drop by one-third this year, analysts at Fitch Solutions said on Friday.
“There’s an upward bias here, considering there’s supply-side outages and potential ones lurking,” RBC Capital Markets LLC commodity strategist Michael Tran said by telephone. “The market could be tighter than what people previously anticipated.”
In a news conference, Guaido, who this week declared himself acting Venezuelan president, said he is preparing to dismiss the head of state-run oil company Petroleos de Venezuela SA as well as the board of its Houston-based refining arm, Citgo Petroleum Corp, taking on two of the power centers that help to bankroll the Maduro government.
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