Oil prices rose more than 1 per cent on Thursday as supply concerns resurfaced after US President Donald Trump's revoked a licence granted to US oil major Chevron to operate in Venezuela, reports Reuters.
Gains were capped, however, by signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows, and an unexpected rise in US gasoline and distillate stocks.
Brent crude oil futures were up 86 cents, or 1.19 per cent, at $73.39 a barrel by 1240 GMT. US West Texas Intermediate crude oil futures rose 78 cents, or 1.14 per cent, to $69.40.
The contracts had settled in the previous session at their lowest since December 10.
"Prices are stabilising this morning around their two-month lows after Trump reversed Chevron's licence to export Venezuelan oil," said PVM analyst Tamas Varga.
The Chevron licence news means the company will no longer be able to export Venezuelan crude. And if Venezuelan state oil company PDVSA exports oil previously exported by Chevron, U.S. refineries will be unable to buy it because of US sanctions.
"Chevron's exit could reduce Venezuela (oil) production, giving OPEC+ capacity to increase output. If this occurs, coastal U.S. refiners could incur higher procurement costs," TD Cowen analysts said in a note.
If OPEC+ does not increase supply, it could increase heavy sour prices, which would hit US refiners, the analysts said.
Chevron exports about 240,000 barrels per day (bpd) of crude from its Venezuela operations, more than a quarter of the country's entire oil output. Trump's involvement in efforts to facilitate a Russia-Ukraine peace deal are also in focus.
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