Oil prices rose due to a decline in U.S. fuel inventories and increased Middle East tensions. Brent crude increased by 0.57% while WTI rose by 0.51%. Key factors included unexpected drops in distillate inventories and military actions involving Israel and the U.S. Chevron requested an extension for its operations in Venezuela amid these developments.
On Thursday, oil prices experienced an uptick, driven by a decline in U.S. fuel inventories and heightened tensions in the Middle East. Specifically, Brent crude futures increased by 40 cents, representing a 0.57% rise, reaching $71.18 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 34 cents, or 0.51%, to settle at $67.50.
This escalation in prices followed U.S. government data indicating a larger-than-expected reduction in distillate inventories for the previous week. Distillate inventories, which encompass diesel and heating oil, plummeted by 2.8 million barrels, significantly surpassing the anticipated decrease of 300,000 barrels as forecasted in a Reuters poll.
Conversely, U.S. crude inventories rose by 1.7 million barrels, exceeding the expected increase of 512,000 barrels. The global risk premium surged as Israel initiated a new ground operation in Gaza after violating a ceasefire that had lasted nearly two months.
Additionally, the U.S. escalated airstrikes targeting Houthi positions in Yemen in retaliation for attacks on vessels in the Red Sea. Former President Trump has also stated that he will hold Iran accountable for future Houthi aggressions.
Ukrainian President Volodymyr Zelenskiy indicated a potential quick cessation of strikes on energy facilities in the ongoing conflict with Russia, suggesting progress towards a ceasefire that could ease sanctions and reintroduce Russian supplies to the market. Furthermore, Trump’s Middle East envoy, Steve Witkoff, mentioned that renewed discussions between U.S. and Russian officials aimed at stopping the conflict would occur in Saudi Arabia on Sunday.
In the Americas, Chevron’s CEO has reportedly requested a 60-day extension from the Trump administration to conclude its operations in Venezuela, according to the Wall Street Journal. Meanwhile, Venezuela’s state-run oil company, PDVSA, is preparing to continue oil exports from its joint venture with Chevron, as reported by Reuters.
In summary, the rise in oil prices is attributed to declining U.S. fuel inventories coupled with escalating tensions in the Middle East. Noteworthy developments include significant drops in distillate inventories, increased U.S. crude inventories, military engagements in Gaza and Yemen, and discussions concerning peace in the Russia-Ukraine conflict. Additionally, corporate activities regarding Chevron’s operations in Venezuela highlight the evolving landscape of global oil supply.
Original Source: www.cnbc.com
