Trump Again Sways Oil Trading, Crude Rises Over 2% On Chevron's Venezuela Ouster

But the Russia/Ukraine peace talks continue to cap gains: File Image/Pixabay

U.S. president Donald Trump on Thursday yet again influenced oil traders, this time causing them to reverse course and propel crude prices upward by over 2 percent by revoking a license  to Chevron to operate in Venezuela.

The revocation occurred in response to Venezuelan president Nicolas Maduro not upholding his end of a bargain to take back criminals who had entered the U.S. at the rapid pace Washington had stipulated.

Chevron exports about 240,000 barrels per day (bpd) of crude from its Venezuela operations, over a quarter of the country's entire oil output.

As of 1828 GMT on Thursday, Brent was up $1.53, or 2.1 percent, at $74.06 per barrel, while West Texas Intermediate rose $1.64, or 2.4 percent, to $70.26.

Trump's vow to impose a 10 percent tariff on imported energy resources from Canada next week also inspired traders to contemplate market tightness, while the brash billionaire's efforts to bring about peace between Russia and Ukraine (part of the process will see Ukrainian president Volodymyr Zelenskiy visiting Washington on Friday to sign an agreement on rare earth minerals) conversely tempered Thursday's gains.

Tamas Varga, analyst at PVM, said, "Prices are stabilizing this morning around their two-month lows after Trump reversed Chevron's license to export Venezuelan oil."

But Varga added, "Markets like clarity as opposed to uncertainty; unless a clear path is presented on tariffs and Eastern European peace, oil prices will remain on the defensive with sporadic and spontaneous headline-based rallies."

Stephen Innes, managing partner at SPI Asset Management, echoed the bearish sentiment of many analysts by stating that expectations for the future have taken a "meaningful dive," and that concern over tariffs and the Federal Reserve is "bleeding into both consumer and business sentiment….that's a slow-burning macro headwind that could snowball into real economic weakness down the line."

Innes went on to remark that at the same time, lower bond yields amid escalating trade tensions suggest markets are "bracing for a slowdown, not a surge in inflation."

Compounding the gloom, Bloomberg reported that "Even with Thursday's gain, crude is still on track for its biggest monthly loss since September as the prospect of trade wars weighs on the outlooks for economic growth and energy demand in the U.S. and China, the world's two largest consumers."

Still, the news agency hinted that trading could turn bullish thanks to possible supply constraints, "including renewed U.S. efforts to squeeze flows from Iran and Venezuela, along with expectations that OPEC+ will once again defer a plan to progressively raise output."