Oil prices rose on Wednesday due to a decline in U.S. crude and fuel inventories and the U.S. threat to impose tariffs on countries purchasing Venezuelan oil, intensifying market concerns about tight global supplies. Brent crude futures ended up 1.05%, at $73.79 a barrel. U.S. crude futures rose 0.94%, to $69.65 a barrel. At the session high, both benchmark contracts rose more than $1 per barrel.
The U.S. Energy Information Administration (EIA) stated that U.S. crude inventories decreased last week as refineries ramped up output, with gasoline and distillate stockpiles also falling. The EIA report indicated that for the week ending March 21, crude inventories fell by 3.3 million barrels, down to 433.6 million barrels, exceeding the drop of 956,000 barrels expected by a Reuters poll.
Moreover, U.S. President Trump on Tuesday threatened to impose tariffs on countries buying oil from Venezuela, a move that has stalled Venezuelan oil trade with China. John Kilduff, a partner at Again Capital LLC, commented, "The market is worried these oil supplies may be limited, so we could lose these resources."
However, the oil price gains were limited by news of an agreement between the U.S., Ukraine, and Russia to suspend maritime attacks and energy target assaults, with Washington agreeing to push for lifting some sanctions on Moscow. This news offset the support for oil prices from the Venezuelan situation, with Kilduff suggesting that Russian oil supplies might fill the market gap.
