Oil pares gains on possible US OK for Chevron to renew Venezuelan operations
Brent crude futures were up 26 cents, or 0.38%, to $68.77 a barrel by 1:14 p.m. CDT (1814 GMT). U.S. West Texas Intermediate crude futures rose 44 cents, or 0.67%, to $65.69 per barrel.
Earlier in the session, WTI had been up more than a dollar and Brent crude came near that level.
"The news about Chevron being able to go back into Venezuela and get oil going again just took the knees out of the market," said John Kilduff, partner at Again Capital LLC.
Kilduff said the market does not expect the Trump administration will open up Venezuela to other U.S. oil companies.
"This is a unique one-off," he said.
Oil was stronger on news Russia was planning to cut gasoline exports to all but a few allies and nations Mongolia, with which it has supply agreements.
"Russia looking to cut off gasoline exports gave the market a boost," said Phil Flynn, senior analyst with Price Futures Group. "The market was looking for a reason to go higher."
Early in the session, futures gained on the previous day's report of a U.S. crude inventory draw and on hopes for a trade deal between the U.S. and the European Union that would lower tariffs.
"The U.S. crude inventory draw and the trade efforts are adding some support to prices," said Janiv Shah, an analyst at Rystad.
On Wednesday, two European diplomats said the EU and the U.S. were moving toward a trade deal that could include a 15% U.S. baseline tariff on EU imports and possible exemptions. This could pave the way for another major trade agreement following the Japan deal.
Also on Wednesday, U.S. Energy Information Administration data showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far exceeding analysts' expectations in a Reuters poll for a 1.6 million-barrel draw.
Oil prices were also supported by a suspension of Azeri crude exports from the Turkish port of Ceyhan and a brief halt to loadings at Russia's main Black Sea ports which has since been resolved.
BP (BP.L), opens new tab said organic chlorides were detected in some of the oil tanks in the terminal at Ceyhan, adding that oil loading continued from some of the tanks with chloride levels assessed to be within normal specifications, while export activities via the BTC pipeline also continued.
Traders will watch for further news on loadings from Ceyhan and Novorossiysk, which together make up around 2.5% of global oil supply at 2.5 million barrels per day, according to Reuters calculations based on loading data from the region.
Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders.
"Next to watch would be the demand indicators as we are in the peak season and any upside or downside would impact refining margins," Rystad's Shah added.
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