Oil prices inched up on Wednesday as investors considered supply risks after the U.S. barred Chevron (CVX.N) from exporting crude from Venezuela under a new asset authorisation, though expectations of more output from OPEC+ continued to limit gains.
Brent crude futures rose 25 cents, or 0.4%, to $64.34 a barrel by 0345 GMT, while U.S. West Texas Intermediate crude gained 24 cents, or 0.4%, at $61.13 a barrel.
The Trump administration has issued a new authorisation for U.S.-major Chevron (CVX.N), that would allow it to keep assets in Venezuela but not to export oil or expand its activities, Reuters reported on Tuesday citing sources.
“The loss of Chevron’s Venezuelan barrels in the U.S. will leave refiners short and thus relying more on Middle Eastern crude,” Westpac’s head of commodity and carbon strategy Robert Rennie wrote in a note.
U.S. President Donald Trump had revoked the previous licence on February 26.
In recent years, the licences to Chevron and other foreign companies supported a slight recovery in sanction-hit Venezuelan oil output to about 1 million barrels per day.
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However, price gains were capped on Wednesday amid expectations that OPEC+ will decide to increase output at a meeting this week.
A full meeting of the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, is scheduled for Wednesday, though no policy changes are expected. A July output hike could be decided on Saturday when eight members of the group hold talks, according to sources.
“Oil prices have moved only marginally in the last couple of sessions as the industry largely braces for an oversupplied second half of the year,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Sachdeva added that OPEC members’ failure to comply with production quotas and Trump’s trade policies negatively impact global oil demand.
The market also found some support after Trump said earlier this week he was weighing new sanctions on Russia.
“This increases the risk of further sanctions against Russia, putting Russian energy flows at risk,” said ING commodities strategists on Wednesday.
