Oil rose to the highest since October as US President Donald Trump touted a growing US military presence near Iran, while traders monitored the fallout from a sweeping winter storm and a weaker dollar boosted the appeal of commodities.
West Texas Intermediate gained 2.9% to settle above $62, while a gauge of the greenback fell to its lowest level in four years amid investor caution about US policymaking, making commodities priced in the currency more attractive.
Oil has rebounded this year, despite widespread expectations of a glut, as setbacks to Kazakh exports tightened the European market and US threats against Iran injected a risk premium into prices.
Trump reiterated on Tuesday that a “flotilla” was headed to the Middle East, adding that he’d “rather not see anything happen.” In the options market, a bullish call skew in US futures has stayed intact for nearly two weeks, marking the longest stretch since October 2024. Investors frequently turn to options as a relatively inexpensive hedge against uncertain geopolitical outcomes.
In the US, freezing conditions have disrupted a number of refineries on the Gulf Coast and a smattering of domestic output, though the impact is unlikely to be prolonged. US natural gas futures retreated on Tuesday following a powerful rally due to the cold snap, as did diesel futures in New York.
Concerns about Kazakh supplies, meanwhile, have eased as a key Black Sea terminal came back online, while the country’s largest producer is preparing to resume output at the giant Tengiz field. Still, Tengiz is set to restore less than half of its normal production by Feb. 7, according to Reuters, limiting downward pressure on prices.
Elsewhere, Chevron Corp. is working to bring more Venezuelan crude to a market that’s mostly well supplied. US officials are working to issue a general license that would lift some sanctions on the South American crude giant’s energy sector, Reuters reported.
OPEC+ is scheduled to meet this weekend to review a decision on output policy for next month, and is expected to stick with plans to keep oil production steady. There’s no sign so far of any need to respond to events in member states Venezuela and Iran, according to one delegate.
Oil Prices
- WTI for March delivery added 2.9% to settle at $62.39 a barrel in New York.
- Brent for March settlement was 3% higher to settle at $67.57 a barrel.
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.
