Oil Prices Surge as Trump Revokes Chevron’s License in Venezuela

Oil prices rose sharply amid supply concerns following Trump’s revocation of Chevron’s license in Venezuela. Gold prices fell due to a stronger dollar and economic data showing slower GDP growth. Investors are awaiting further developments regarding U.S. tariffs and economic indicators affecting market performance.

Oil prices experienced a notable increase on Thursday as concerns about global supply disruptions intensified following President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela. This change is expected to hinder oil production further, particularly in the context of existing U.S. sanctions on Venezuela, among other countries. As a result, Brent crude saw an increase of 2.1%, reaching $74.04 per barrel, while U.S. crude futures rose by 2.5% to $70.35 per barrel.

In addition to oil market dynamics, gold prices fell to their lowest level since February 7 as the U.S. dollar strengthened against several major currencies. The dollar’s rise came in the wake of U.S. economic data indicating a 2.3% growth in GDP for the fourth quarter, a noticeable drop from the previous quarter’s 3.1% rise. Furthermore, unemployment claims rose by 22,000 to a three-month high, significantly surpassing estimates.

The dollar index saw a notable uptick of 0.8%, reaching 107.2, influenced by President Trump’s recent announcement regarding the enforcement of 25% tariffs on commodities from Mexico and Canada starting in early March. The Canadian dollar depreciated by 0.7%, while the Australian dollar fell by 1.1% against the U.S. dollar. This strengthening dollar makes gold, which is denominated in dollars, more expensive for holders of other currencies, contributing to the decline in gold prices.

Gold spot prices dropped 1.35% to $2,877 per ounce, representing a significant retreat from earlier highs. Since achieving a peak of $2,956 per ounce, profit-taking has led to considerable reductions in gold pricing. Market sentiment continues to be influenced by expectations surrounding the Federal Reserve’s interest rate decisions, with lowered expectations for rate cuts in March now prevailing.

Overall, the economic landscape appears challenged by rising inflation concerns and economic growth projections. Given these developments, traders are keenly awaiting further economic indicators, including updates on GDP growth and unemployment claims. Additionally, they are looking for commentary from Federal Reserve officials regarding monetary policy strategies in the battle against inflation.

In summary, ongoing geopolitical tensions and economic data strongly influence both oil and gold markets. President Trump’s policies, including tariff implementations and sanctions against Venezuela, have led to increased oil prices, while gold has seen price declines due to a stronger dollar. Investors are now focused on forthcoming economic reports and Federal Reserve insights that may impact market trends.

Original Source: www.economies.com