MW Oil prices settle higher after Trump moves to end Venezuela crude deal

By Myra P. Saefong and William Watts

Policy uncertainty is 'bleeding into both consumer and business sentiment': analyst

Oil futures settled higher on Thursday, finding support a day after President Donald Trump said he was revoking a license issued by the Biden administration that had allowed Chevron Corp. to produce oil in Venezuela.

Prices remained lower week to date, however, with U.S. tariffs on Canada and Mexico expected to come into effect next week, potentially hurting the outlook for the economy and for energy demand.

Price moves

-- West Texas Intermediate crude CL00 for April delivery CL.1 CLJ25 rose $1.73, or 2.5%, to settle at $70.35 a barrel on the New York Mercantile Exchange.

-- April Brent crude BRNJ25, the global benchmark, climbed $1.51, or 2.1%, to $74.04 a barrel on ICE Futures Europe. The more actively traded May contract BRN00 BRNK25 gained $1.50, or 2.1%, to $73.57 a barrel.

-- March gasoline RBH25 tacked on nearly 2.5% to $2 a gallon, while March heating oil HOH25 added 2.2% to $2.40 a gallon.

-- Natural gas for April delivery NGJ25 settled at $3.93 per million British thermal units, down 0.6%.

Market drivers

Trump said on Wednesday that he would revoke a license granted to Chevron $(CVX)$ in 2022 to operate in Venezuela and to export crude to the U.S. despite sanctions then in place. The U.S. has imported around 270,000 barrels a day of Venezuelan crude so far this year, analysts at ING noted.

Trump's reversal of the license allowing Chevron to operate in Venezuela could halt the company's ability to export Venezuelan crude, tightening global oil supplies, said George Pavel, general manager at trading platform Naga.com Middle East, in emailed commentary.

WTI and Brent settled Wednesday at their lowest marks since Dec. 10, with recent pressure tied to worries that proposed tariffs by the Trump administration will undercut global growth. Prices for both WTI and Brent crude remained lower for the week and month to date.

Expectations for the future have taken a "meaningful dive," reinforcing a growing concern that policy uncertainty, particularly related to tariffs and the Federal Reserve, is "bleeding into both consumer and business sentiment," said Stephen Innes, managing partner at SPI Asset Management. "That's a slow-burning macro headwind that could snowball into real economic weakness down the line."

U.S. data this week showed an index of consumer confidence dropped 7 points in February to an eight-month low of 98.3.

"Tariffs and their broader impact on North American markets are at the forefront," Innes told MarketWatch. "Trump's looming tariff threats against Canada and Mexico in March, followed by planned broad duties in April, are turning up the heat on global trade tensions."

At the same time, lower bond yields amid escalating trade tensions suggest markets are "bracing for a slowdown, not a surge in inflation," Innes said.

Then there's the "geopolitical wild card," with the U.S. potentially gaining a significant stake in Ukraine's mineral rights, he said. "There's every reason to believe Washington will want to monetize those assets. That means pushing the Ukraine-Russia peace plan forward and ultimately pulling back on Russian sanctions, bringing more [oil] barrels back to market."

The U.S. and Ukraine were expected this week to sign a deal on minerals.

See: The 3 biggest things to know about a potential U.S.-Ukraine minerals deal

Meanwhile, prices for natural gas looked to pare a portion of their losses for the week after the Energy Information Administration reported Thursday that U.S. supplies of the fuel declined by 261 billion cubic feet for the week that ended Feb. 21.

That was the seventh largest weekly withdrawal in 10 years, said Seth Harper, commodity analyst at Schneider Electric. However, this withdrawal was "mostly expected by the market due to the intense cold last week."

On average, analysts had forecast a fall of 265 bcf, according to a survey by Platts, part of S&P Global Commodity Insights, which pegged the five-year average withdrawal for the period at 141 bcf.

-Myra P. Saefong -William Watts

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February 27, 2025 15:14 ET (20:14 GMT)

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