Oil prices rose over 2% following President Trump’s cancellation of Chevron’s license to operate in Venezuela. Investors are also monitoring a potential peace deal in Ukraine. Brent crude settled at $74.04, while WTI reached $70.35. Chevron’s exit may reduce Venezuela’s oil output, potentially affecting OPEC+ decisions and U.S. refiners’ costs.

On Thursday, oil prices experienced an increase of over 2% due to renewed supply concerns following U.S. President Donald Trump’s cancellation of Chevron’s operational license in Venezuela. Investors are also monitoring developments regarding a peace agreement in Ukraine, which could impact Russian oil exports. Brent crude futures concluded the day at $74.04 a barrel, rising by $1.51, while U.S. West Texas Intermediate crude futures climbed $1.73 to settle at $70.35.

The revocation of Chevron’s license restricts the company from exporting Venezuelan crude, potentially leading to new negotiations between Chevron and the Venezuelan state oil company, PDVSA, for exports to alternative markets. Chevron represents a significant portion of Venezuela’s oil production, providing approximately 240,000 barrels per day. This development may give OPEC+ an opportunity to adjust production levels, affecting U.S. refiners’ procurement costs.

Analysts suggest that reductions in Venezuelan output could empower OPEC+ to increase overall oil production. Furthermore, ongoing discussions within OPEC+ regarding production policies for April reflect complexities faced by member countries due to recent U.S. sanctions on Venezuela, Iran, and Russia. Andrew Lipow of Lipow Oil Associates predicts that OPEC+ will likely postpone any adjustments to production cuts at least through April and possibly into the second quarter.

On the diplomatic front, President Trump expressed his role in fostering a peace accord between Russia and Ukraine. He mentioned a forthcoming visit by Ukrainian President Volodymyr Zelenskiy to Washington regarding a rare earth minerals agreement, emphasizing that ongoing U.S. support is crucial. Concurrently, recent economic reports indicate a slowdown in U.S. growth, while applications for unemployment benefits rose unexpectedly, suggesting mounting economic pressures.

In summary, oil prices rose significantly following Trump’s cancellation of Chevron’s license in Venezuela, which may lead to decreased oil production from the region and impact OPEC+ production decisions. The evolving geopolitical climate, particularly concerning U.S. support for Ukraine, alongside the latest economic indicators, adds complexity to the oil market dynamics. Stakeholders remain vigilant regarding potential shifts in both production strategies and international relations that could further influence prices.

Original Source: money.usnews.com

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