Oil prices ticked up from two-month lows on Thursday following a key decision by U.S. President Donald Trump to revoke a license that allowed Chevron to operate in Venezuela, potentially tightening crude supply.
By 0154 GMT, Brent crude oil futures had gained 19 cents, or 0.3%, to $72.72 per barrel, while U.S. West Texas Intermediate (WTI) crude was up by 16 cents, or 0.2%, trading at $68.78 per barrel.
Both benchmarks had settled at their lowest levels since December 10 the previous day, driven by a surprise increase in U.S. fuel inventories, which raised concerns about weakening demand, as well as hopes for a potential peace deal between Russia and Ukraine.
Trump’s announcement to reverse the Chevron license, initially granted by his predecessor Joe Biden more than two years ago, sent shockwaves through the market. Chevron, which exports around 240,000 barrels per day of crude from Venezuela, contributes to over a quarter of the country’s total oil output. With the license revoked, Chevron will no longer be able to export Venezuelan crude.
“The news regarding Venezuela sparked a correction following the recent sell-off fueled by speculation around Russia-Ukraine ceasefire talks,” explained Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
He added that the market was also supported by potential buying from the U.S. Strategic Petroleum Reserve (SPR), especially with WTI trading near its lowest point in over two months. Last week, Trump indicated that his administration would prioritize filling up the SPR. He criticized Biden for tapping into the reserve to lower gasoline prices, suggesting a shift in the U.S.’s energy strategy.
Meanwhile, market focus remains on the ongoing Russia-Ukraine peace talks. Trump mentioned that Ukrainian President Volodymyr Zelenskiy would visit Washington on Friday to sign a deal regarding rare earth minerals, while Zelenskiy emphasized that the success of the agreement would depend on continued U.S. support and the outcome of the talks.
On the supply front, U.S. crude oil stockpiles unexpectedly fell last week, as refining activity increased, while gasoline and distillate inventories saw surprising gains, according to the Energy Information Administration (EIA).
Kikukawa noted that the recent sell-off, which had been triggered by rising product inventories during this off-peak seasonal period, was likely over, as demand transitions from kerosene to gasoline.
In a separate development, Goldman Sachs released a note on Wednesday, asserting that the U.S. administration’s dual objectives of commodity dominance and affordability support their Brent crude price forecast of between $70-85 per barrel. This price range is expected to support strong U.S. supply growth in the coming months.
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