Oil prices rose slightly on Friday as market participants weighed concerns about supply risks, though the chances of a U.S. strike on Iran have receded.
Brent gained 5 cents, or 0.1%, to $63.81 per barrel, while U.S. West Texas Intermediate rose 8 cents, or 0.1%, to $59.27 per barrel at 0749 GMT.
Both Brent and WTI rose to multi-month highs this week after protests flared up in Iran and U.S. President Donald Trump signalled the potential for strikes on the nation. Brent prices were still set for a fourth week of gains.
"Given the potential political upheaval in Iran, oil prices are likely to experience greater volatility as markets digest the potential for supply disruptions," BMI analysts said in a note to clients.
Late on Thursday, Trump said Tehran's crackdown on the protesters was easing, allaying worries about possible military action that could disrupt oil supplies.
"While (Iranian supply) risks have eased somewhat, they remain significant, keeping the market nervous in the short term," IG analysts said in a client note.
"Any escalation with Iran will also raise concerns about potential disruption to oil flows through the Strait of Hormuz, a chokepoint where around 20m b/d passes," they added.
Analysts remained bearish on expectations of longer supply this year despite earlier OPEC expectations for a balanced market.
"Sentiment is driving markets, but the impact of headlines is always short-lived, especially when fundamentals look comfortable in the backseat," said Phillip Nova senior market analyst Priyanka Sachdeva.
"Despite the steady drumbeat of geopolitical risks and macro speculation, the underlying balance still points to ample supply ... 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."
On Wednesday, OPEC said oil supply and demand would remain balanced in 2026, with demand rising in 2027 at a similar pace to growth for this year.
Looking ahead, market participants were expecting near-term price movements to centre around geopolitical and macroeconomic factors.
Immediate drivers for the oil market would likely be the situation in Iran and China's data dump next week, said OANDA senior market analyst Kelvin Wong, adding that WTI crude is expected to trade in a sideways range between $55.75 and $63.00 per barrel in the near term. - Reuters
