Oil prices remained stable on Friday, bouncing back from a sharp selloff, as President Donald Trump's remarks eased fears of potential military action against Iran. This shift in sentiment led to a more balanced outlook for the week, with Brent Oil Futures and West Texas Intermediate (WTI) futures showing modest gains. The week had previously seen significant volatility, with prices initially surging to multi-month highs due to anti-government protests in Iran, which raised concerns about potential disruptions in oil exports from the OPEC member.

The recent price decline was triggered by Trump's comments downplaying the likelihood of imminent U.S. military action against Iran. This easing of geopolitical tensions helped deflate the risk premium that had built up earlier in the week. Analysts at ING noted that while risks have eased, they remain significant, keeping the market cautious. The longer the situation persists without U.S. intervention, the more likely it is for the risk premium to fade, allowing bearish market fundamentals to dominate.

Adding to the bearish outlook, Trump also signaled a potential easing of tensions with Venezuela, which could lead to an increase in Venezuelan oil exports. This move, coupled with recent U.S. inventory data showing higher crude and fuel stockpiles, has reinforced concerns about oversupply in the market. Venezuelan state-run oil firm PDVSA has begun rolling back production cuts, a sign that exports may resume under U.S. oversight, further adding to global supply.

Looking ahead, experts suggest monitoring geopolitical developments closely, as any escalation could quickly reverse the current stability. The market's response to inventory data and production changes in Venezuela will also be crucial in determining the future trajectory of oil prices. Investors and analysts alike are watching these factors closely to anticipate the next move in the oil market.