The prices of crude oil grades rose by about 1 per cent on Thursday as US crude draws and expected cuts to Russian petrol exports overlooked the United States’ approval of Chevron to renew production in Venezuela.
According to data, Brent crude futures settled at $69.18 a barrel after chalking up 67 cents or 0.98 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $66.03 a barrel, up 78 cents or 1.20 per cent.
US President Donald Trump’s administration is preparing to allow limited oil operations in the sanctioned nation of Venezuela, a member of the Organisation of the Petroleum Exporting Countries (OPEC).
Reuters reported that President Trump might now allow some energy companies to pay oilfield contractors and make necessary imports to secure operational continuity in the country. Some imports could be swapped for Venezuelan oil, as authorized in previous licenses.
Chevron, which previously produced up to 240,000 barrels per day through its joint ventures with the Venezuelan state oil company, PDVSA, welcomed the decision but remained cautious.
Relations between the two countries have been tense for years, and the US government publicly supporting opposition leaders against the incumbent, President Nicolas Maduro.
Mr Trump in February announced the cancellation of a handful of energy licenses in Venezuela, including Chevron’s, and gave until late May to wind down all transactions.
The move left all operations in oil and gas joint ventures with Chevron and other partners in the state-run PDVSA’s hands, but the companies were authorized to preserve their stakes and output remained almost unchanged.
Also, the previous day’s report of a US crude inventory draw and hopes for a trade deal between the US. and the European Union that would lower tariffs continued to offer support.
US Energy Information Administration data showed crude inventories fell last week by 3.2 million barrels to 419 million barrels.
Two European diplomats said the EU and the US were moving toward a trade deal that could include a 15 per cent US baseline tariff on EU imports and possible exemptions.
This move could pave the way for another major trade agreement following a deal with Japan.