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Oil benchmarks closed higher on Friday, supported by short covering ahead of the extended Martin Luther King weekend in the US and residual geopolitical risk premiums tied to Iran. 

Brent settled at $64.13 per barrel, up 0.58%.

WTI finished at $59.44 per barrel, up 0.42% on the session. 

The price advance appeared driven predominantly by traders reducing short exposure into the long holiday, with limited fresh fundamental catalysts. Heightened geopolitical anxiety, centred on the possibility of US military action against Iran, has underpinned a modest risk premium, though market participants caution that actual escalation remains uncertain. 

Offsetting geopolitical concerns are potential supply tailwinds, particularly expectations of increased Venezuelan exports as sanctions dynamics evolve. These prospective flows, if realised, could add to existing global supply headwinds and cap further upside. 

Oil markets have exhibited notable volatility this month, with prices previously spiking on perceived disruption risks before retreating on signals of de-escalation, highlighting the tension between geopolitical sentiment and underlying supply fundamentals.

Written by: Farid Muzaffar