Oil prices are recovering as the U.S. announces trade deals with countries such as Japan and reports emerge of a sharp decline in American crude inventories.
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Brent crude oil, the international standard, is up 1% and trading at $69.06 a barrel. West Texas Intermediate (WTI) crude, the U.S. benchmark, is also up 1% at $65.91 per barrel. Analysts say that energy markets are now focused on U.S.-European Union trade talks and whether the two powers can reach a negotiated deal before U.S. President Donald Trump’s August 1 tariff deadline.
A recent trade deal with Japan lowers duties on automotive imports and spares the Asian nation from new levies in exchange for a $550 billion package of investments and loans sent to America. Still, uncertainty over U.S.-China trade negotiations and the ongoing war between Ukraine and Russia are limiting further upside in oil prices, say some analysts.
The rise in crude prices is helping to lift the stocks of oil majors such as Chevron (CVX), ExxonMobil (XOM), and Shell (SHEL).
Inventories Fall
In recent months, WTI crude oil has been range-bound between $60 and $70 a barrel. On the supply side, the U.S. Energy Information Administration has reported that U.S. crude oil inventories fell last week by 3.2 million barrels to a total of 419 million barrels. That decline was greater than the 1.6-million-barrel drawdown expected among analysts.
Separately, foreign oil tankers were temporarily prevented from loading at Russia’s main Black Sea ports due to new regulations, effectively halting exports from Kazakhstan. And the U.S. government has reiterated that it is considering sanctions on Russian oil to help end the ongoing war in Ukraine.
Is CVX Stock a Buy?
The stock of Chevron has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on nine Buy, five Hold, and one Sell recommendations assigned in the last three months. The average CVX price target of $164.00 implies 9.30% upside from current levels.
