Today has been rather interesting for energy stocks. News that President Joe Biden and his administration are coordinating the largest-ever strategic petroleum reserve release has energy prices down. Accordingly, investors in Chevron (NYSE:CVX) and CVX stock may not be surprised it’s in the red today.
However, Chevron is also a name many investors have reason to be bullish on. Oil prices are still near historical highs. Plus, despite the near-term reprieve the release may bring consumers, it’s widely expected that structural issues will still lead to higher energy prices for some time. For producers like Chevron, that’s a very good thing.
Additionally, there’s currently a lot of news around other measures the U.S. is looking to in order to ease energy costs. One possibility? The U.S. may renew diplomatic relations with energy-producing countries like Venezuela.
As it happens, Chevron has some intriguing ties to Venezuela. So, let’s dive into what investors may want to watch with CVX stock.
One Key Catalyst to Keep on the Radar with CVX Stock
In addition to the aforementioned reserve release, the Biden Administration is also reportedly looking at easing sanctions on Venezuela. The U.S. still doesn’t recognize the country’s leader, Nicolás Maduro, as president. Accordingly, sanctions put on Venezuela have stopped imports from reaching the States for some time.
That said, Venezuela happens to produce low-cost energy in proximity to the United States. And, given the recent market-related concerns, desperate times call for desperate measures. As such, the limiting of sanctions may allow companies with operations in Venezuela to start shipping to the U.S. for the first time in many years.
Chevron is one of those companies with operations in Venezuela. What’s more, in addition to having more markets open for export, this announcement may result in other bullish catalysts for the U.S. energy giant. Specifically, there are now talks to allow “Chevron and other holders of defaulted Venezuelan debt to get paid, which currently is blocked by U.S. sanctions.”
Right now, there seems to be plenty of reason to like CVX stock. The recent announcement is a big deal. For investors looking at the energy sector, Chevron may be an interesting pick, especially at these levels.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
