Oil prices rise for second day on Venezuela, Iran supply concerns

Oil prices climbed for a second consecutive day on January 10 and were on track for a third weekly gain as markets absorbed supply concerns from Venezuela and Iran.

Brent crude futures rose 44 cents or 0.71% to $62.43 per barrel by 0203 GMT, whilst US West Texas Intermediate gained 39 cents or 0.68% to $58.15. Both benchmark crudes jumped more than 3% on January 9 after two consecutive days of declines.

Brent was heading for a 2.7% weekly gain whilst WTI was on course for a 1.4% advance. Prices strengthened following the Trump administration's arrest of Venezuelan President Nicolas Maduro earlier this week and statements that the US would take control of the South American nation's oil sector.

Supply disruption fears have intensified as protests continue in Iran, a major Middle Eastern producer. Iran's protests entered their tenth day on January 6, with at least 36 people killed and more than 2,000 arrested.

Economic grievances including currency depreciation and rising prices have driven the demonstrations.

The Russian-Ukrainian war continues to affect Russian oil exports, adding to supply concerns.

Haitong Futures said in a note on January 10 that oil prices had risen after several days of decline and "corrected in one way or another the previous disregard for geopolitical risks," Reuters report.

However, the firm noted that global inventories continue to rise and supply increases remain the main driver that could limit gains. "Unless the risks surrounding Iran escalate, the recovery is likely to be limited and difficult to sustain," Haitong Futures said.

Iran produces approximately 3mn barrels per day of crude oil, making it one of the world's largest producers. The country has faced international sanctions affecting its oil exports, though it continues to supply oil to China and other buyers.

Any significant disruption to Iranian production could tighten global oil markets.