Miniatures of oil barrels and a rising stock graph are seen in this illustration taken January 15, 2024.
Oil prices rose slightly on Thursday, recovering from two-month lows, following U.S. President Donald Trump’s decision to revoke a license that allowed Chevron to operate in Venezuela. This move could reduce crude oil supply. Brent crude oil futures increased by 19 cents, or 0.3%, reaching $72.72 per barrel by 0154 GMT. U.S. West Texas Intermediate crude oil futures gained 16 cents, or 0.2%, settling at $68.78 per barrel.
On Wednesday, both benchmarks had dropped to their lowest levels since December 10, influenced by an unexpected increase in U.S. fuel inventories, suggesting softer demand. Discussions of a possible ceasefire between Russia and Ukraine also contributed to the earlier decline. Trump announced the reversal of the Chevron license, originally granted by President Joe Biden over two years ago, affecting the company’s operations in Venezuela. Chevron exports approximately 240,000 barrels per day of crude from the country, accounting for more than a quarter of Venezuela’s total oil production. With the license canceled, Chevron will cease exporting Venezuelan crude.
Hiroyuki Kikukawa, president of NS Trading, a Nissan Securities subsidiary, noted: "The Venezuela news triggered unwinding after the recent sell-off amid Russian-Ukraine ceasefire talks." He added: "Potential buying from the U.S. Strategic Petroleum Reserve also supported the market since WTI was trading near its lowest level in over two months." Last week, Trump expressed plans to replenish the Strategic Petroleum Reserve swiftly, criticizing Biden’s earlier use of the reserve to lower gasoline prices.
Attention remains on Trump’s efforts to broker peace between Russia and Ukraine. He stated that Ukrainian President Volodymyr Zelenskiy would visit Washington on Friday to sign an agreement on rare earth minerals. Zelenskiy emphasized that the deal’s outcome depends on the peace talks and sustained U.S. support. Meanwhile, the Energy Information Administration reported an unexpected decline in U.S. crude oil stockpiles last week, driven by higher refining activity. However, gasoline and distillate inventories rose unexpectedly.
Kikukawa observed: "Since this is a seasonal off-peak period, with demand shifting from kerosene to gasoline, the sell-off driven by rising product inventories has likely run its course." Separately, Goldman Sachs stated in a Wednesday note that the U.S. administration’s focus on commodity dominance and affordability aligns with the bank’s Brent price range forecast of $70-85 per barrel. This range supports steady U.S. supply growth. The market continues to monitor these developments, with supply dynamics and geopolitical negotiations shaping price movements.
