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Oil prices rise more than 2%
Oil prices rose more than 2% during trading on Thursday, February 27, at the settlement, with renewed concerns about supplies after US President Donald Trump revoked the license of US oil giant Chevron to operate in Venezuela.
However, investors are still watching for any signs of a possible peace agreement to end the war between Russia and Ukraine, which could lead to an increase in Russian oil flows.
Brent crude futures rose $1.51, or 2.08%, to $74.04 a barrel at the settlement.
US crude futures also rose $1.73, or 2.52%, to settle at $70.35 a barrel, according to Reuters.
“Markets like clarity, unlike uncertainty. Unless a clear path is provided on tariffs and peace in Eastern Europe, oil prices will remain on the defensive with sporadic and spontaneous rallies based on headlines,” said PVM analyst.
The revocation of Chevron’s license means it will not be able to export Venezuelan crude. If Venezuela’s state oil company PDVSA exports the oil that Chevron was exporting, U.S. refiners will not be able to buy it because of U.S. sanctions.
The move could lead to a new deal between the U.S. company and Venezuela’s PDVSA to export crude to non-U.S. destinations, sources close to the talks told Reuters.
Chevron exports about 240,000 barrels per day of crude from its operations in Venezuela, more than a quarter of the country’s total oil output.
“Chevron’s exit could reduce Venezuela’s (oil) production, giving OPEC+ the ability to ramp up production. If that happens, U.S. coastal refiners could incur higher procurement costs,” TD Cowen analysts said in a note.
Oil prices also rose on Thursday after Reuters reported that OPEC+ was discussing whether to raise oil production in April as planned or freeze it amid recent U.S. sanctions on Venezuela, Iran and Russia, according to eight sources in the alliance. Attention also focused on the U.S. president’s involvement in efforts to facilitate a peace deal to end the Russia-Ukraine war.
