Oil prices rose for the first time in three days, driven by supply concerns after Trump revoked Chevron’s license to operate in Venezuela. Brent crude futures increased by 24 cents, while U.S. West Texas Intermediate crude rose 18 cents. Market analysts cite potential recovery in oil prices amid shifting dynamics in U.S. inventory and geopolitical factors, including upcoming peace talks with Ukraine.
Oil prices experienced an increase for the first time in three days, spurred by concerns over supply as U.S. President Donald Trump announced the cancellation of a license previously granted to Chevron for operations in Venezuela. Brent crude futures gained 24 cents, reaching $72.77 per barrel, while U.S. West Texas Intermediate crude rose by 18 cents to $68.80 per barrel. This positive trend follows a sharp decline in prices the day before, attributed to unexpected builds in U.S. fuel inventories, signaling weak demand and potential peace talks between Russia and Ukraine.
The license annulment will impact Chevron’s significant contribution to Venezuela’s oil production, as the company exports approximately 240,000 barrels of crude per day. Hiroyuki Kikukawa, president of NS Trading, noted that the news regarding Venezuela has prompted a market recovery after a prior sell-off spurred by news of ceasefire discussions in Ukraine. Additionally, potential purchases from the U.S. Strategic Petroleum Reserve were contributing to the market’s upward momentum, as WTI was trading near its two-month low.
President Trump recently emphasized his plans to replenish the Strategic Petroleum Reserve, critiquing the Biden administration’s use of it to control gasoline prices. Market focus remains on the upcoming peace talks concerning Ukraine, including a visit from Ukrainian President Volodymyr Zelenskiy to Washington aimed at signing an agreement regarding rare earth minerals. The success of this agreement will reportedly depend on the outcomes of these discussions and ongoing U.S. support.
The Energy Information Administration highlighted a surprising decrease in U.S. crude oil stockpiles amid rising refining activity, along with unexpected increases in gasoline and distillate inventories. Kikukawa remarked that the current seasonal off-peak period, which typically sees a shift in demand from kerosene to gasoline, suggests that the recent sell-off attributed to climbing product inventories has likely reached its conclusion.
In a recent commentary, Goldman Sachs affirmed that the U.S. government’s dual objectives of maintaining commodity dominance while ensuring affordability would sustain their Brent price forecast range of $70 to $85, which is favorable for significant U.S. supply growth.
The oil market reacted positively following Trump’s announcement about Chevron’s operations in Venezuela, impacting supply concerns. The U.S. Strategic Petroleum Reserve’s potential activity also supported the prices, with analysts noting an adjustment in market trends after recent inventory builds. Overall, factors such as geopolitical developments and refining activity are critical in shaping current oil price trends, alongside broader economic strategies outlined by financial institutions like Goldman Sachs.
Original Source: clubofmozambique.com
