Oil News: Futures Rebound as Chevron’s Venezuela License Is Revoked

Light Crude Oil Futures See Modest Gains

Light crude oil futures are showing modest gains on Thursday, recovering slightly after touching a low of $68.36 in the previous session—their weakest point since December 27. Technical indicators present a mixed outlook, with immediate support at $67.06 and resistance at the Fibonacci level of $70.35. The 200-day moving average at $70.60 also poses a notable hurdle for bullish  momentum.

At 11:35 GMT, Light crude oil futures are trading $69.40, up $0.78 or +1.14%.

Trump Cancels Chevron’s Venezuela License, Boosting Supply Concerns

Oil prices received a boost following U.S. President Donald Trump’s decision to cancel Chevron’s license to operate in Venezuela. The sudden policy reversal undoes a license granted by former President Joe Biden over two years ago. Chevron, which exports about 240,000 barrels per day (bpd) of Venezuelan crude—accounting for over 25% of the country’s total oil output—will now be barred from continuing these exports.

This policy change has reignited supply concerns in an already sensitive market, contributing to the unwinding of short positions established during the recent sell-off. The cancellation of the Venezuela license comes as traders assess the potential for increased demand following reports of potential purchases for the U.S. Strategic Petroleum Reserve (SPR).

Strategic Petroleum Reserve Purchases Could Support Prices

The possibility of the U.S. government purchasing crude to refill the SPR has offered additional support to the market. Last week, Trump indicated his administration’s intent to rapidly replenish the SPR, contrasting sharply with his criticism of Biden’s previous use of the reserve to lower gasoline prices. The potential for government buying could provide a temporary floor for oil prices if executed near current levels.

Inventory Data Paints a Mixed Picture

The latest data from the Energy Information Administration (EIA) showed an unexpected draw in U.S. crude stockpiles, down 2.3 million barrels to 430.2 million barrels, defying expectations of a 2.6 million-barrel build. However, stocks at the Cushing, Oklahoma hub rose by 1.3 million barrels to 24.6 million barrels, the highest since November.

Meanwhile, gasoline inventories increased by 400,000 barrels to 248.3 million barrels, and distillate stockpiles jumped by 3.9 million barrels, significantly overshooting predictions of a 1.5 million-barrel draw. Refinery utilization also climbed to 86.5%, indicating robust refining activity despite the mixed product inventory data.

Market Forecast: Bearish Bias with Cautious Optimism

While light crude oil futures have rebounded slightly, the market sentiment remains cautious. With resistance levels looming near $70.35 and $70.60, any upward movement might face stiff challenges unless significant bullish catalysts emerge. The unexpected build in gasoline and distillate stocks, combined with geopolitical uncertainty surrounding Trump’s Russian-Ukrainian peace talks, adds to the bearish undertone.

In the near term, traders should watch for potential SPR purchases and developments in Venezuelan crude supply. If the market breaches the $67.06 support level, it could trigger a deeper sell-off, while a break above $70.60 may spark a more substantial recovery. For now, the market leans bearish, but the possibility of strategic reserve buying and geopolitical changes could quickly change market sentiment.

More Information in our Economic Calendar.