Oil Prices Rebound Following Trump’s Revocation of Chevron’s License in Venezuela
Oil prices rose as President Trump revoked Chevron’s license to operate in Venezuela, heightening supply concerns. However, potential peace negotiations in Ukraine and an unexpected increase in U.S. gasoline and distillate stocks tempered gains, with analysts highlighting the importance of clarity in geopolitical affairs to stabilize prices.
Oil prices experienced an uptick on Thursday following the announcement that U.S. President Donald Trump had revoked Chevron’s license to operate in Venezuela. This revocation raised supply concerns among investors. However, the increase was moderated by the emergence of a potential peace agreement in Ukraine, which may lead to increased oil flow from Russia, alongside an unexpected rise in U.S. gasoline and distillate stocks.
By 10:49 GMT, Brent crude futures rose by 71 cents, or 0.98 percent, reaching $73.24 per barrel, while U.S. West Texas Intermediate crude saw an increase of 64 cents, or 0.93 percent, climbing to $69.26. Prior to this, both contracts had settled at their lowest levels since December 10, with a monthly loss of approximately 4.5 percent for both benchmarks.
Analyst Tamas Varga of PVM noted, “Prices are stabilizing this morning around their two-month lows after Trump reversed Chevron’s licence to export Venezuelan oil.” Market participants are also closely monitoring Trump’s involvement in the ongoing discussions regarding a Russia-Ukraine peace deal. Additionally, Trump mentioned that Ukrainian President Volodymyr Zelenskiy would arrive in Washington on Friday to sign a cooperation agreement concerning rare earth minerals.
“Markets like clarity as opposed to uncertainty. Unless a clear path is presented on tariffs and Eastern European peace, oil prices will remain on the defensive with sporadic and spontaneous headline-based rallies,” Varga added. Furthermore, the Energy Information Administration reported an unexpected decline in U.S. crude oil stockpiles last week attributed to higher refining activity, despite surprising gains in both gasoline and distillate inventories.
In summary, oil prices have risen due to President Trump’s cancellation of Chevron’s operation license in Venezuela, highlighting supply concerns. However, the rally is tempered by potential peace developments in Ukraine and an unexpected increase in U.S. fuel inventories. Analysts emphasize the need for clarity in geopolitical situations to stabilize oil prices in the future.
Original Source: www.channelnewsasia.com