U.S. Stockpiles: U.S. crude oil stockpiles unexpectedly fell by 2.3 million barrels to 430.2 million barrels in the week ending February 21, as refining activity increased, while gasoline and distillate inventories saw surprise builds of 400,000 and 3.9 million barrels receptively. Stocks at the Cushing, Oklahoma delivery hub rose by 1.3 million barrels to 24.6 million barrels, their highest level since November. Imports of Canadian crude climbed by 165,000 barrels per day, but were still below the record levels reached earlier in the year due to expected tariffs from President Trump, set to begin March 4. Refinery crude runs increased by 317,000 barrels per day, with utilization rates rising to 86.5% of total capacity. Gasoline stocks grew by 400,000 barrels, while distillate inventories increased by 3.9 million barrels, which led to concerns over lower refined product exports. U.S. crude imports rose by 292,000 barrels per day, while exports of total petroleum products fell to their lowest level since October 2023.
Venezuelan Oil: U.S. President Donald Trump announced he was reversing a license granted to Chevron in 2022 by his predecessor, Joe Biden, allowing the company to operate in Venezuela, citing President Nicolás Maduro's lack of progress on electoral reforms and migrant returns. While Trump did not explicitly name Chevron, the license had permitted the company to export Venezuelan crude, a major source of the country's oil output. Venezuelan officials condemned the decision, claiming it worsened migration and hurt the economy, which had benefited from Chevron's operations. The reversal means Chevron can no longer export Venezuelan oil, and U.S. refineries would be unable to buy it if Venezuela's state oil company took over those exports. U.S. Energy Secretary Chris Wright emphasized that the decision would not significantly impact global oil supply, given the U.S. is the world's largest oil producer.
BP: BP has reversed its previous strategy to become a renewables leader and refocused on oil and gas production. CEO Murray Auchincloss announced a shift away from his predecessor's ambitious 2020 plan to transform BP, aiming to boost oil and gas output by up to 2.5 million barrels per day by 2030. The company has also reduced its investment in low-carbon energy, abandoned renewable generation growth targets, and scrapped its goal to cut overall emissions by 2030. BP's ambitious push into renewables had been hampered by inflation, technical issues, and rising energy prices, leading to financial losses, impairments, and underperforming stock. The company has spun off its offshore wind business, plans to sell half of its solar assets, and faces speculation of a potential takeover due to its ongoing financial struggles.
Market Overview: Oil prices rose by more than 1% on Thursday following U.S. President Donald Trump's revocation of Chevron's license to operate in Venezuela, raising supply concerns. However, gains were limited by the potential for a peace deal in Ukraine, which could lead to increased Russian oil flows, and an unexpected rise in U.S. gasoline and distillate stocks. U.S. West Texas Intermediate crude rose 1.14%, settling at $69.40, after hitting its lowest level since December 10. Chevron’s exit from Venezuela could reduce the country’s oil production, potentially raising procurement costs for U.S. refineries, especially if OPEC+ does not increase supply. Meanwhile, uncertainty over U.S.-Russia-Ukraine talks and market clarity kept oil prices volatile, with a focus on the potential impact of peace negotiations and continued U.S. aid to Ukraine.
BP announced a major shift in strategy, cutting its planned investment in renewable energy by over $5 billion and increasing its annual oil and gas spending to $10 billion. The move comes after pressure from U.S. activist investor Elliott Investment Management, which now holds a 5% stake in BP. The company plans to invest between $13 billion and $15 billion annually through 2027, reducing capital expenditure by $1 billion to $3 billion compared to previous projections. BP will also raise its dividend by at least 4% per share annually and expects first-quarter share buybacks of $750 million to $1 billion. BP aims to grow oil and gas production to 2.3 to 2.5 million barrels of oil equivalent per day by 2030. This strategy marks a shift away from its previous ambitious renewable energy goals, now focusing on reducing carbon intensity and being more selective with its investments in energy transition.
Oil prices rose more than 2% on Thursday due to supply concerns after the U.S. revoked Chevron’s license to operate in Venezuela, limiting U.S. access to Venezuelan crude. The market is also monitoring potential peace talks in Ukraine, which could lead to higher Russian oil flows. Chevron's exit from Venezuela may reduce the country’s oil output, driving up procurement costs for U.S. refiners. OPEC+ is discussing whether to increase oil output in April, with uncertainty surrounding sanctions on Venezuela, Iran, and Russia contributing to market volatility. The situation remains unclear, leaving oil prices vulnerable to sudden headline-driven shifts.
