Oil prices rose on Thursday after President Trump’s decision to withdraw Chevron’s Venezuela license, reversing a previous downtrend. Brent crude increased to $72.77 and WTI to $68.80 per barrel. Market analysts attribute the price shift to supply concerns and ongoing geopolitical factors, particularly related to Ukraine. Goldman Sachs maintains a favorable price range for Brent amid these developments.
Oil prices experienced an increase on Thursday after President Donald Trump announced the cancellation of a license previously granted to Chevron, allowing its operations in Venezuela. Brent crude oil futures rose by 24 cents to $72.77 a barrel, while U.S. West Texas Intermediate crude increased by 18 cents to $68.80 per barrel, marking the first gain after a three-day decline.
This reassessment in oil pricing followed a dip due to a surprising increase in U.S. fuel inventories, raising fears of diminishing demand alongside optimism regarding potential peace negotiations between Russia and Ukraine. Both oil benchmarks have fallen approximately 5% this month, reaching their lowest levels since December 10.
Trump’s announcement on Wednesday indicated a reversal of Chevron’s operating license in Venezuela, issued over two years ago by his predecessor, President Joe Biden. With Chevron exporting around 240,000 barrels of crude oil daily—accounting for over a quarter of Venezuela’s total oil production—this cancellation will inhibit the company’s ability to export crude from the country.
Industry experts, like NS Trading President Hiroyuki Kikukawa, noted, “The Venezuela news triggered unwinding after the recent sell-off amid Russian-Ukraine ceasefire talks,” indicating that such events have influenced market responses. Additionally, potential purchases by the U.S. Strategic Petroleum Reserve provided further market support, considering that WTI was nearing its lowest pricing in over two months.
In his recent remarks, Trump pledged rapid refilling of the Strategic Petroleum Reserve, criticizing Biden for utilizing it to lower gasoline prices. With ongoing deliberations regarding U.S. support for Ukraine, anticipation builds around Ukrainian President Volodymyr Zelenskiy’s forthcoming visit to Washington, which may lead to a pivotal agreement concerning rare earth minerals.
According to the Energy Information Administration, unexpected declines in U.S. crude oil stockpiles occurred last week amid rising refining activity. Nevertheless, gasoline and distillate stockpiles recorded notable increases, prompting Kikukawa to suggest that the seasonal inventory-related sell-off has likely run its course.
Moreover, Goldman Sachs indicated the U.S. government’s efforts towards maintaining commodity superiority and affordability, reinforcing their Brent price range forecast at $70-85, an outlook they deem favorable for U.S. supply growth.
In summary, the recent increase in oil prices stems from President Trump’s decision to revoke Chevron’s license for operations in Venezuela, highlighting growing supply concerns. Market responses to this development, the Strategic Petroleum Reserve’s potential actions, and the broader geopolitical landscape indicate ongoing fluctuations in oil prices. U.S. crude inventories reflect mixed signals, complicating the demand outlook against a backdrop of evolving international dynamics.
Original Source: clubofmozambique.com
