Oil dips as market weighs Venezuela turmoil, supply glut

Oil prices edged lower as investors assessed the potential fallout from the capture of Venezuelan President Nicolás Maduro by US forces and what it could mean for global crude supplies and Venezuela’s wider energy sector.

Brent crude traded near $60 a barrel after swinging between gains and losses earlier in the session, while West Texas Intermediate hovered around $57, News.Az reports, citing Bloomberg.

Despite the dramatic developments in Venezuela over the weekend, the OPEC member accounts for only a small share of global oil production, and the market is already contending with a growing supply glut.

Venezuela was once a major oil-producing nation, but its output has declined sharply over the past two decades and now makes up less than 1% of global supply, most of which is exported to China. The oil market is expected to face a significant surplus this year as OPEC+ and other producers add more barrels while demand shows signs of softening.

On Sunday, OPEC+ reaffirmed its decision to pause supply increases during the first quarter. The group, led by Saudi Arabia and Russia, did not discuss the situation in Venezuela during its brief 10-minute video conference, according to delegates, who said it was too early to determine how the group should respond to the unfolding events.

Despite the US attacks on Saturday, Venezuela’s oil infrastructure including Jose port and Amuay refinery and main producing areas in the Orinoco Belt wasn’t affected, according to people familiar with the matter. Still, recent American pressure on Maduro’s regime, including the seizure of tankers, have forced the country to start shutting some oil wells.

President Donald Trump said on Saturday that sanctions on the nation’s industry will remain in place, but added US companies will help rebuild the sector and revive output, in what is likely to be a lengthy process. He told reporters on Monday that companies wanted to go into Venezuela “badly.”

News.Az