Oil prices have rebounded due to President Trump’s revocation of Chevron’s license to operate in Venezuela, a move likely to constrict global crude supply. Brent crude increased to $72.72 per barrel, while WTI rose to $68.78. The decision comes amidst fluctuating U.S. fuel inventories and ongoing geopolitical negotiations related to Russia and Ukraine, with Goldman Sachs anticipating Brent crude prices to remain between $70-85 moving forward.
Oil prices saw an uptick on Thursday following a significant decision by U.S. President Donald Trump to revoke Chevron’s operating license in Venezuela. This action is anticipated to tighten global crude supplies as it restricts Chevron from exporting 240,000 barrels per day, which constitutes over 25% of Venezuela’s total production. As a result, Brent crude futures experienced an increase of $0.19, reaching $72.72 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by $0.16 to $68.78 per barrel.
The oil market had previously been pressured by an unexpected increase in U.S. fuel inventories, which indicated weaker demand, alongside the optimism surrounding potential peace discussions between Russia and Ukraine. Analysts like Hiroyuki Kikukawa commented, “The Venezuela news triggered some unwinding of recent sell-offs, especially amid ongoing Russian-Ukraine ceasefire discussions.”
In addition to the Chevron decision, speculation around potential purchases for the U.S. Strategic Petroleum Reserve (SPR) has contributed to market support. President Trump, in the past, criticized President Biden for utilizing the SPR to alleviate gasoline prices and promised to expedite the refilling of these reserves.
Market focus remains on the developments concerning U.S. and Russian-Ukrainian relations, particularly with Ukrainian President Volodymyr Zelenskiy set to visit Washington to finalize a rare earth minerals agreement. However, Zelenskiy has underscored that the agreement’s success is contingent on continuous U.S. support.
On the inventory front, U.S. crude stockpiles saw an unexpected decline last week, yet there were concurrent increases in gasoline and distillate inventories, reflecting typical seasonal variations in demand. Kikukawa further noted that the recent sell-off related to rising fuel inventories “has likely run its course,” indicating that the demand shift from kerosene to gasoline is underway.
In terms of forecasts, Goldman Sachs reaffirmed its Brent crude price baseline range at $70-85 per barrel, underscoring the U.S. administration’s push towards achieving commodity dominance and affordability as key factors driving the market.
In summary, the recent decision by President Trump to revoke Chevron’s license in Venezuela is expected to tighten global oil supplies, contributing to an increase in oil prices. While the market is responding positively to this news, uncertainties remain regarding inventory levels and geopolitical developments. Analysts suggest that demand dynamics are shifting, positioning the oil market for potential stability in the near term. Goldman Sachs remains optimistic about future price levels, aligning with U.S. strategic interests.
Original Source: www.emirates247.com
