Oil Prices Rise Amid Supply Concerns Following Trump’s Chevron License Cancellation

Oil prices rose on Thursday following President Trump’s cancellation of Chevron’s license to operate in Venezuela, amidst supply concerns. However, gains were limited by possible developments in Ukraine that could increase Russian oil supply and rising U.S. gasoline and distillate stocks. Brent and West Texas Intermediate futures saw minor increases, stabilizing after recent lows.

Oil prices experienced an increase on Thursday as apprehensions over supply constraints emerged following U.S. President Donald Trump’s revocation of Chevron’s license to conduct operations in Venezuela. However, this upward momentum was somewhat restrained by positive developments regarding a potential peace agreement in Ukraine, which might lead to increased oil supplies from Russia, as well as an unexpected rise in U.S. gasoline and distillate inventories.

By 1049 GMT, Brent crude oil futures rose by 71 cents, or 0.98 percent, reaching $73.24 per barrel, while U.S. West Texas Intermediate crude oil futures climbed 64 cents, or 0.93 percent, to $69.26. Both contracts had previously settled at their lowest prices since December 10, with declines of approximately 4.5 percent reported for the month.

Analyst Tamas Varga from PVM noted, “Prices are stabilizing this morning around their two-month lows after Trump reversed Chevron’s licence to export Venezuelan oil.” The focus also remains on Trump’s role in facilitating a peace deal between Russia and Ukraine.

Varga further commented, “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.” This indicates that investor sentiment is influenced by geopolitical developments and market stability.

Interestingly, U.S. crude oil stockpiles fell unexpectedly in the past week as refining activity increased. Conversely, gasoline and distillate inventories saw unexpected growth, according to the latest report from the Energy Information Administration.

In conclusion, oil prices are currently reflecting a mix of factors, including supply concerns triggered by the revocation of Chevron’s license in Venezuela and potential geopolitical resolutions in Eastern Europe. While prices have shown some recovery, market volatility persists due to uncertainties. The fluctuations underscore the significance of clarity in policy and international relations on oil pricing.

Original Source: www.channelnewsasia.com