Crude oil prices surged by 2.25% to settle at 6,135 as supply concerns intensified following U.S. President Donald Trump’s decision to revoke Chevron (NYSE: CVX)’s license to operate in Venezuela. This move effectively blocks the export of 240,000 barrels per day (bpd) of Venezuelan crude, further tightening global supplies and adding upward pressure to prices.

Supply Constraints and Market Reactions

The decision to revoke Chevron’s license comes amid ongoing geopolitical tensions and efforts by the U.S. to exert pressure on Venezuela’s government. With the loss of Venezuelan crude exports, global oil supply tightens, leading to bullish sentiment in the market. However, these gains were partially offset by reports of a possible peace deal in Ukraine, which, if realized, could pave the way for increased Russian oil exports, balancing some of the supply shortfalls.

Adding to the complexity, an unexpected rise in U.S. gasoline and distillate stocks weighed on crude oil prices. According to the American Petroleum Institute (API), U.S. crude inventories dropped by 640,000 barrels in the week ending February 21. However, data from the Energy Information Administration (EIA) showed a larger-than-expected decline of 2.332 million barrels, defying market expectations of a 2.54million barrel build.

Inventory and Production Trends

While overall U.S. crude stocks declined, inventories at Cushing, Oklahoma, saw an increase of 1.282 million barrels. Meanwhile, gasoline and distillate inventories climbed by 0.369 million and 3.908 million barrels, respectively. These inventory fluctuations indicate that while crude supply remains constrained, refined product stockpiles are building, potentially tempering further price gains.

In a key development, the EIA revised its crude oil production forecast higher, now expecting

U.S. output to reach 13.59 million bpd in 2025, up from its previous estimate of 13.55 million bpd. Despite Trump’s push to maximize domestic oil production, energy firms continue to prioritize capital discipline over aggressive expansion, suggesting that rapid production increases may not materialize as quickly as anticipated.

Technical Analysis of Crude oil Prices and Market Outlook

From a technical perspective, the market is experiencing short covering, as evidenced by a sharp 27.84% drop in open interest to 3,644 while prices rose by 135 rupees.

• Immediate support is at 6,060, with further downside potential to 5,933.
• Resistance levels are seen at 6,250, and a breakout above this level could push prices toward 6,267.

With supply concerns still dominant and geopolitical factors influencing sentiment, traders should watch key price levels and inventory data closely. The interplay between supply disruptions, potential Russian exports, and U.S. production trends will determine the next phase of crude oil price movements.

Until then, Happy Trading!

Commodity Samachar Securities
We Decode the Language of the Markets

Also Read: Crude Oil Price at a Critical Turning Point – What’s Next?

Recommended Read: India’s Semiconductor Surge: Powering the Future of Electronics!

Want Help On Your Trades ?

Chat with us