Oil Prices Surge Following Trump’s Cancellation of Chevron’s…

Oil prices increased as President Trump reversed Chevron’s Venezuelan license. This decision, coupled with new U.S. inventory data and ongoing peace talks in Eastern Europe, influenced market dynamics. Brent crude rose to $72.77 while WTI climbed to $68.80. Experts from NS Trading noted the correlation between these announcements and market reactions.

Oil prices increased on Thursday after U.S. President Donald Trump announced the reversal of a license previously granted to Chevron to operate in Venezuela. Brent crude futures saw an uptick of 24 cents, or 0.33%, reaching $72.77 per barrel, while U.S. West Texas Intermediate crude futures rose 18 cents, or 0.26%, to $68.80 per barrel.

The rise in prices follows a significant decrease the day before, where markets settled at their lowest levels since December 10. This decline was attributed to an unexpected rise in U.S. fuel inventories, indicating weaker demand, along with positive sentiments regarding a potential peace agreement between Russia and Ukraine, leading to a loss of approximately 5% in both benchmarks for the month.

Trump’s announcement regarding Chevron, which exports roughly 240,000 barrels per day from Venezuela—accounting for more than a quarter of the nation’s oil output—significantly impacts the market. Hiroyuki Kikukawa from NS Trading noted, “The Venezuela news triggered unwinding after the recent sell-off amid Russian-Ukraine ceasefire talks.”

Additionally, potential purchases from the U.S. Strategic Petroleum Reserve (SPR) contributed to a more favorable market environment, especially since WTI prices were close to their lowest level in over two months. Trump had indicated the urgency of filling the SPR and criticized President Biden for utilizing it to lower gasoline prices.

Current focus remains on the upcoming discussions related to U.S.-Ukrainian relations as President Zelensky is expected to visit Washington. This is paired with a note from Goldman Sachs affirming that U.S. energy policy’s aims for both commodity dominance and affordability would support a Brent price range of $70-85, further promoting U.S. supply growth.

Lastly, the Energy Information Administration reported unexpected decreases in U.S. crude oil stocks amidst increased refining activity, although gasoline and distillate inventories showed unanticipated surges. Kikukawa concluded, “Since this is a seasonal off-peak period… the sell-off driven by rising product inventories has likely run its course.”

In summary, the recent reversal of Chevron’s operating license in Venezuela by President Trump has led to an increase in oil prices, amidst fluctuations due to U.S. inventory reports and ongoing geopolitical tensions. Market participants are closely monitoring the impact of these developments on oil supply and prices, particularly with Trump’s statements regarding the Strategic Petroleum Reserve. Overall, the dual goals of commodity affordability and dominance reflect a stable Brent price projection by Goldman Sachs.

Original Source: clubofmozambique.com