Oil futures finished Thursday’s session sharply higher and the energy complex broadly rose, as traders fretted over a looming supply outage in Iran and falling output in Venezuela.
“The looming supply outages in Iran and the increasing outages in Venezuela explain why prices recovered quickly again,” wrote commodity analysts led by Eugen Weinberg at Commerzbank in Frankfurt, in a Thursday note.
They noted that several European oil companies have announced plans to withdraw from their businesses in Iran due to the risk of U.S. sanctions, while Reuters data shows that Venezuela is behind in its shipments to customers by almost a month.
U.S. benchmark West Texas Intermediate crude for July delivery rose $1.22, or 1.9%, to settle at $65.95 a barrel on the New York Mercantile Exchange. August Brent crude , the global benchmark, gained $1.96 or 2.6%, at $77.32 a barrel on the ICE Futures Europe exchange.
Venezuela is “nearly a month behind delivering its crude to customers due to falling output and congestion in its key oil ports,” said analysts at ICICI Bank in a daily note. “This was exacerbated after ConocoPhillips /zigman2/quotes/207605056/composite COP +0.36% seized assets [last month] in the Caribbean port of Venezuela, which is hindering the ability to load cargoes and deal with its customers.”
WTI oil prices had notched a two-month low Wednesday after the U.S. Energy Information Administration said crude supplies climbed by 2.1 million barrels in the week ended June 1, versus expectations for a decline of more than 1 million barrels.
Concerns about excess U.S. supply have allowed the spread between WTI and Brent to widen, leaving the U.S. discount to the global benchmark near $11 a barrel. Globally, oil prices have been pressured by speculation the Organization of the Petroleum Exporting Countries and its allies will move to boost production in an effort to make up some of the lost Iranian and Venezuelan output. OPEC is scheduled to meet on June 22.
The EIA data also showed gasoline stockpiles rose by 4.6 million barrels last week, while distillate inventories rose 2.2 million barrels. The buildup in product inventories could also remain a drag on WTI, analysts said.
“We are beginning to see a particularly lackluster start to the U.S. driving season, with higher pump prices likely weighing on demand,” wrote analysts at JBC Energy in Vienna.
July gasoline , meanwhile, rose 4.48 cents, or 2.2%, to $2.1148 a gallon, following Wednesday’s 1.7% decline, and marked its largest daily percentage increase since May 9, while July heating oil added 5.33 cents, or 2.5%, to $2.1799 a gallon.
Natural-gas futures, meanwhile, extended earlier gains after the EIA data showed Thursday that U.S. supplies of the fuel rose by 92 billion cubic feet for the week ended June 1. That matched the average forecast of analysts surveyed by S&P Global Platts.
July natural gas ended up 3.4 cents, or 1.2%, to $2.93 per million British thermal units.
—Mark DeCambre contributed to this article