Oil prices rose slightly after President Trump revoked Chevron’s Venezuela license, potentially tightening global supply. Brent futures gained to $72.72 per barrel, while WTI increased to $68.78. Market dynamics are influenced by changing inventories, geopolitical tensions, and expectations of U.S. strategic reserve purchases, with Goldman Sachs maintaining a price forecast of $70-85 for Brent crude.
Oil prices experienced a modest rebound on Thursday following U.S. President Donald Trump’s decision to revoke a key operating license for Chevron in Venezuela. This development may lead to a tightening of global crude supply. By 0154 GMT, Brent crude futures climbed by $0.19 (0.3%) to $72.72 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by $0.16 (0.2%) to $68.78 per barrel. Both benchmarks had recently settled at their lowest levels since December, affected by rising U.S. fuel inventories and optimism surrounding peace discussions between Russia and Ukraine.
Trump’s revocation halts Chevron’s operations that allowed for the export of 240,000 barrels per day, representing more than 25% of Venezuela’s oil production. This potential disruption to supply has shifted market dynamics, with Hiroyuki Kikukawa of NS Trading noting that this news prompted a reversal of recent market sell-offs, particularly as peace talks between Russia and Ukraine progress.
Support for oil prices was also influenced by discussions regarding potential purchases of the U.S. Strategic Petroleum Reserve (SPR), with Trump looking to refill it after previous withdrawals aimed at reducing gasoline prices. Criticism was directed at Biden’s decision to tap into the SPR, indicating ongoing geopolitical tensions surrounding commodity management.
Investor attention remains significantly on U.S.-Russia-Ukraine relations, particularly with Ukrainian President Volodymyr Zelenskiy scheduled to visit Washington soon. This visit involves discussions centered on a rare earth minerals agreement critical for future supply chains, although successful implementation hinges on sustained U.S. support.
U.S. crude stockpiles showed an unexpected decline last week, but increases in gasoline and distillate inventories reflected typical seasonal demand shifts. Kikukawa commented that the earlier sell-off due to rising inventories likely reached its limit as the market transitions demand focus from kerosene to gasoline. Goldman Sachs has maintained its Brent crude price forecast range of $70-85, emphasizing the U.S. administration’s efforts to enhance commodity control and affordability as driving market forces.
In summary, oil prices are rebounding due to the revocation of Chevron’s Venezuela license by President Trump, which could reduce global oil supply. The interplay of U.S. strategic reserve purchases, geopolitics regarding Russia and Ukraine, and fluctuating inventories suggest a complex market landscape. Overall, a mixed outlook remains as analysts predict stable price ranges amid shifting demand patterns.
Original Source: www.emirates247.com
