Oil prices rose modestly during Asian trade on Wednesday, driven by fresh concerns over supply disruptions in Venezuela after the United States restricted Chevron’s crude exports from the country.
However, gains were capped by expectations that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) alliance may increase production in the coming days.
As of 3:10 pm AEST (5:10 am GMT), Brent crude futures climbed $0.30, or 0.5%, to $64.39 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose $0.29, or 0.5%, to $61.18 a barrel.
The move followed reports of a new asset authorisation issued by the Trump administration that permits Chevron to retain its Venezuelan assets but bars the U.S. oil major from exporting crude or expanding operations there.
President Donald Trump had previously revoked the earlier licence on 26 February. The prior licences had facilitated a limited recovery in Venezuela’s oil output, allowing production to reach around 1 million barrels per day despite international sanctions.
Still, oil’s upward momentum was restrained by growing speculation that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will decide to raise production at an upcoming meeting.
While the full group was expected to meet on Wednesday with no immediate policy changes anticipated, sources noted that eight member nations could settle on a July output increase during talks slated for Saturday.
“Data show continued over production led to a 411kb/d increase in output for July, as members such as Saudi Arabia look to punish non-compliant members,” analysts at ANZ said.
They added that while preliminary discussions were underway, Russia’s Deputy Prime Minister Alexander Novak stated that the eight countries which voluntarily cut production by 2.2 million barrels per day have not yet formally discussed a July increase.
Geopolitical tensions provided additional market support. Oil prices pared earlier losses after CNN reported the U.S. may introduce new sanctions on Russia in response to recent drone attacks on Ukraine.
