Oil prices increased for the first time in three days as President Trump revoked Chevron’s Venezuela license, raising supply concerns. Brent crude climbed to $72.77 per barrel, while West Texas Intermediate reached $68.80. The impact of Chevron’s export capabilities, ongoing U.S.-Russia negotiations, and inventory trends remain critical factors influencing the market.
Oil prices experienced an upward movement for the first time in three days, primarily driven by supply concerns following President Donald Trump’s announcement regarding Chevron’s operations in Venezuela. As of 0328 GMT on Thursday, Brent crude futures rose by 24 cents, or 0.33%, reaching $72.77 per barrel, while West Texas Intermediate crude futures increased by 18 cents, or 0.26%, to $68.80 per barrel. These increases come on the heels of a recent low, with both benchmarks down approximately 5% for the month thus far.
President Trump’s decision to revoke the license granted to Chevron by his predecessor, Joe Biden, will significantly impact Chevron’s operations in Venezuela, where it currently exports around 240,000 barrels per day, representing over a quarter of the nation’s total oil production. The cessation of this license prohibits Chevron from exporting Venezuelan crude, exacerbating supply concerns in the market.
Hiroyuki Kikukawa, president of NS Trading, commented that the announcements concerning Venezuela prompted a market rebound following recent selling trends linked to diplomatic discussions between Russia and Ukraine. Additionally, potential purchasing from the U.S. Strategic Petroleum Reserve (SPR) added to market support, especially with West Texas Intermediate prices hovering near two-month lows. Trump previously indicated the commitment of his administration to replenish the SPR.
Market attention continues to be focused on the developments surrounding the conflict between Russia and Ukraine. Trump mentioned that Ukraine’s President Volodymyr Zelensky will visit Washington to finalize an agreement involving rare earth minerals, with the success of this memorandum linked to the ongoing peace negotiations and continuous U.S. support. In a separate report, the Energy Information Administration indicated an unexpected decline in U.S. crude oil inventories, juxtaposed with rising gasoline and distillate stockpiles, as refining activity showed slight improvement.
Kikukawa also pointed out that the current seasonal trend indicates a shift in demand from kerosene to gasoline, suggesting that the recent sell-off, largely driven by increasing product inventories, may have reached its conclusion. Concurrently, in a recent note, Goldman Sachs emphasized that the U.S. administration’s objectives of commodity market dominance and affordability support a Brent crude price range of $70 to $85. This price stability is expected to foster robust growth in U.S. oil production.
Overall, the reversal of Chevron’s license by President Trump has provoked significant movements in oil prices, signaling ongoing concerns about supply amid geopolitical shifts. Market activities will likely remain volatile as the implications of these developments continue to unfold, with particular focus on U.S. inventory trends and international negotiations.
In summary, President Trump’s cancellation of Chevron’s Venezuelan operating license has led to a rebound in oil prices due to concerns about supply disruptions. The market anticipates continued shifts in oil inventory levels, alongside geopolitical developments affecting U.S. relations with Ukraine and Russia. Overall, the stability of oil prices within the range predicted by Goldman Sachs suggests a robust outlook for U.S. oil production in light of changing commodity dynamics.
Original Source: theedgemalaysia.com
