Crude oil futures traded higher on Thursday morning following the US decision to revoke Chevron Corporation’s licence to operate in Venezuela.
At 9.54 am on Thursday, May Brent oil futures were at $72.28, up by 0.29 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $68.74, up by 0.17 per cent.
March crude oil futures were trading at ₹6022 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹6000, up by 0.37 per cent, and April futures were trading at ₹6028 against the previous close of ₹6004, up by 0.40 per cent.
On Wednesday, the US President, Donald Trump, said that he was revoking a licence given to Chevron Corporation to operate in Venezuela. The licence was given by the previous Joe Biden administration.
A post by Trump on social media platform Truth Social said his administration is reversing the concessions given by Joe Biden to Nicolás Maduro, President of Venezuela, on the oil transaction agreement, dated November 26, 2022. “Additionally, the regime has not been transporting the violent criminals that they sent into our Country (the Good Ole’ U.S.A.) back to Venezuela at the rapid pace that they had agreed to. I am therefore ordering that the ineffective and unmet Biden “Concession Agreement” be terminated as of the March 1st option to renew,” Trump said.
In their Commodities Feed for Thursday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said after imposing additional sanctions on Iran’s oil industry, the Trump administration is now eyeing Venezuela, ending Chevron’s licence to operate in the South American nation. Previously, Chevron was allowed to operate there and, despite sanctions, export crude to the US.
Stating that this development has boosted differentials for medium sour crude grades, they said the differential jumped by more than $1 a barrel to $1.71 a barrel. US imports of Venezuelan crude oil have averaged almost 270,000 barrels a day so far this year, they said.
Meanwhile, the weekly petroleum status report released by the US EIA (Energy Information Administration) showed a decline in inventory levels in the US for the week ending February 21.
US commercial crude oil inventories decreased by 2.3 million barrels for the week ending February 21 from the previous week. At 430.2 million barrels, US crude oil inventories were about 4 per cent below the five-year average for this time of year.
However, total motor gasoline inventories increased by 0.4 million barrels from last week and were slightly below the five-year average for this time of year. Finished gasoline inventories decreased, while blending components inventories increased last week.
Total products supplied in the US over the last four-week period averaged 20.3 million barrels a day, up by 4.2 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.4 million barrels a day, down by 0.1 per cent from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels a day over the past four weeks, up by 13.1 per cent from the same period last year. Jet fuel product supplied was up 4.5 per cent compared with the same four-week period last year.
US crude oil refinery inputs averaged 15.7 million barrels per day during the week ending February 21, which was 317,000 barrels per day more than the previous week’s average. Refineries operated at 86.5 per cent of their operable capacity last week. Gasoline production decreased last week, averaging 9.2 million barrels per day. Distillate fuel production increased last week, averaging 5.2 million barrels per day.
March natural gas futures were trading at ₹347.80 on MCX during the initial hour of trading on Thursday against the previous close of ₹349.70, down by 0.54 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March cottonseed oilcake contracts were trading at ₹2646 in the initial hour of trading on Thursday against the previous close of ₹2658, down by 0.45 per cent.
March guargum futures were trading at ₹10010 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹10051, down by 0.41 per cent.
–