Oil prices rose more than 2% on Thursday as supply concerns resurfaced after U.S. President Donald Trump revoked a license granted to U.S. oil major Chevron (NYSE:CVX) to operate in Venezuela.

Investors, however, were still watching for signs of a potential peace deal in Ukraine, which could lead to higher Russian oil flows.

Brent crude futures were up $1.53, or 2.1%, at $74.06 a barrel by 1:28 p.m. EST (1828 GMT). U.S. West Texas Intermediate crude futures were up $1.64, or 2.4%, at $70.26.

The contracts had settled the previous session at their lowest since Dec. 10.

"The market prefers clarity to uncertainty. Unless a clear path is presented on tariffs and Eastern European peace, oil prices will remain on the defensive with sporadic and knee-jerk rallies based on headlines," said Tamas Varga, an analyst at PVM.

Chevron's license revocation means the company will no longer be able to export Venezuelan crude. And if Venezuela's state oil company PDVSA exports oil previously exported by Chevron, U.S. refiners will not be able to buy it due to U.S. sanctions.

The move could also lead to negotiations on a new agreement between U.S. producers and state-owned PDVSA to export crude to destinations other than the U.S., sources familiar with the talks told Reuters.

Chevron exports about 240,000 barrels per day (bpd) of crude from its Venezuelan operations, more than a quarter of the country's total oil output.

" Chevron's exit could reduce Venezuelan (oil) production, giving OPEC+ the capacity to increase production. If this happens, U.S. coastal refiners could incur higher procurement costs," TD Cowen analysts said in a note.

If OPEC+ fails to increase supply, it could send crude prices soaring, which would hurt U.S. refiners, analysts said.

Oil prices rose during intraday trading after Reuters reported that OPEC+ was debating whether to raise oil output in April as planned or freeze it as its members struggle to read the global supply picture due to new U.S. sanctions on Venezuela, Iran and Russia, eight OPEC+ sources said.

Also in focus is Trump's involvement in efforts to broker a Russia-Ukraine peace deal.

Trump said Ukrainian President Volodymyr Zelenskiy would visit Washington on Friday to sign an agreement on rare earth minerals, though the Ukrainian leader said the success of the talks would depend on continued U.S. aid.

U.S. economic growth slowed in the fourth quarter, the government confirmed on Thursday, and the loss of momentum appeared to have continued early in the quarter amid cold weather and concerns that tariffs would hurt spending through higher prices.

Meanwhile, the number of Americans filing new applications for unemployment benefits rose more than expected last week. Separate unemployment programs, reported with a one-week lag, have yet to show the impact of recent mass layoffs of federal government workers who are still on probation.(newsmaker23)

Source: Investing.com