Oil prices rose on Thursday as concerns about supply emerged after President Trump revoked Chevron’s operating license in Venezuela. However, potential peace agreements in Ukraine and rising U.S. gasoline inventories may limit further price increases. Brent crude rose to $73.24, while U.S. WTI increased to $69.26 but faces downward pressure due to ongoing uncertainties in the market.
Oil prices increased on Thursday following U.S. President Donald Trump’s decision to revoke a license for Chevron, allowing the oil major to operate in Venezuela. This development raised concerns about supply disruptions, contributing to a price rebound after recent lows in the market. However, potential offsets to rising prices stemmed from peace negotiations in Ukraine, which could facilitate greater Russian oil exports, and an accidental rise in U.S. gasoline and distillate stock levels.
Brent crude futures saw an increase of 71 cents (0.98%) to $73.24 per barrel, while U.S. West Texas Intermediate futures rose by 64 cents (0.93%) to $69.26. Both markers settled at their lowest since December 10 in the previous session and have experienced approximately a 4.5% decline throughout the month. Market analysts, such as Tamas Varga from PVM, noted that prices are stabilizing close to two-month lows following Trump’s announcement of Chevron’s license cancellation.
Amid Trump’s involvement in pursuing a peace deal between Russia and Ukraine, the return of certainty in negotiations is essential for oil market stabilization. Trump indicated that Ukrainian President Volodymyr Zelenskiy is set to visit Washington to finalize a deal on rare earth minerals, although successful talks are dependent on ongoing U.S. support. Varga emphasized that market conditions favor clarity over uncertainty, suggesting continued volatility in oil prices unless a definitive path is outlined concerning tariffs and Eastern European peace.
The Energy Information Administration reported an unexpected decrease in U.S. crude oil inventories last week, attributed to increased refining activities. Concurrently, there was an unanticipated rise in both gasoline and distillate supplies, suggesting complexities within supply-demand dynamics in the oil market.
In conclusion, oil prices experienced an upswing following Trump’s cancellation of Chevron’s Venezuelan operating license, reflecting supply concerns. However, potential Russian oil influx from peace talks in Ukraine and increased U.S. inventory levels could curb significant price increases. Market analysts underscore the need for clarity in geopolitical negotiations to stabilize oil prices further.
Original Source: www.channelnewsasia.com
