Oil prices made a notable recovery on Thursday, breaking a three-day slump, as the market digested potential supply limitations following President Donald Trump’s announcement to revoke Chevron’s operating license in Venezuela.
The president’s decision comes amidst broader geopolitical dynamics and has reignited concerns over crude availability.
Brent crude oil futures surge 0.55% or 40 cents to $72.93 per barrel, while West Texas Intermediate (WTI) crude oil futures swell 0.57% or 39 cents to $69.01 per barrel.
Just a day prior, oil prices had plummeted to their lowest levels since December 10, driven by an unexpected accumulation in U.S. fuel inventories, which hinted at diminished demand.
Chevron, responsible for exporting approximately 240,000 barrels per day from Venezuela, which constitutes over a quarter of the nation’s oil output, faces a significant setback with the loss of its license.
He also noted potential support from the U.S. Strategic Petroleum Reserve (SPR) purchasing at low price points, as WTI hovered at its lowest in over two months.
Last week, Trump emphasized his intent to replenish the SPR swiftly, critiquing Biden’s prior decision to draw from it in efforts to curb gasoline prices.
Despite an unforeseen dip in U.S. crude stockpiles alongside heightened refining activities, gasoline and distillate inventories rose, adding complexity to the market outlook, according to the U.S. Energy Information Administration.
In a separate analysis, Goldman Sachs highlighted the Biden administration’s dual pursuit of commodity dominance while maintaining affordability, which supports its Brent baseline of $70-85 per barrel, a range favorable to U.S. supply expansion, underscoring the complex interplay of strategic interests and market dynamics.
