Oil Prices Rebound in Asia as Inventory Draws Offset Venezuela Supply Fears

Oil prices edged higher in Asian trading on Thursday, rebounding from two consecutive sessions of losses, although gains were trimmed after a Wall Street Journal report suggested the United States is planning to exert long-term control over Venezuela’s oil industry. The report reignited concerns that global crude supplies could rise materially over the medium term, even as short-term factors offered some support to prices.

Brent crude futures for March delivery rose 0.5% to $60.24 per barrel, while West Texas Intermediate (WTI) crude futures also gained 0.5% to $56.17 per barrel by 23:01 ET (04:01 GMT). Both benchmarks had fallen more than 1% in each of the previous two sessions, pressured by expectations of a widening supply surplus in 2026.

The modest rebound came as markets took some comfort from data showing a larger-than-expected draw in U.S. oil inventories, alongside ongoing geopolitical risks stemming from continued hostilities between Russia and Ukraine, which helped preserve a degree of risk premium in crude markets.

Trump administration eyes long-term control of Venezuelan oil

Oil’s upside, however, was capped after a Wall Street Journal report said President Donald Trump is planning a multi-year initiative to control Venezuela’s oil industry as part of a broader strategy to push crude prices toward his stated target of $50 per barrel.

According to the report, the Trump administration is considering taking control of Venezuela’s state-run oil company, Petróleos de Venezuela SA (PdVSA), following last weekend’s U.S. military operation that resulted in the capture of Venezuelan President Nicolás Maduro.

Trump said earlier this week that Venezuela would turn over between 30 million and 50 million barrels of oil to Washington, potentially worth up to $3 billion. The announcement came just days after U.S. forces detained Maduro, marking one of the most dramatic escalations in U.S.-Venezuela relations in decades.

The president has also signaled that U.S. oil companies will be invited to expand operations in Venezuela. Chevron Corp is seen as being at the forefront of these efforts, with Reuters reporting that the company is in talks to broaden its license to operate in the country. Chevron is currently the only U.S. oil major with active operations in Venezuela, operating under a special authorization that exempts it from the strictest U.S. sanctions.

Supply glut concerns persist despite near-term constraints

Markets remain wary that a sharp increase in Venezuelan production could further swell global oil supplies at a time when concerns about a structural surplus are already mounting. Forecasts from major banks and energy agencies have warned that supply growth from OPEC+ and non-OPEC producers could outpace demand in 2026, placing sustained downward pressure on prices.

That said, analysts caution that any meaningful increase in Venezuelan output is unlikely to happen quickly. Years of underinvestment, deteriorating infrastructure, and the country’s current political instability following the U.S. incursion are expected to limit near-term supply gains.

A separate report from the Financial Times noted that U.S. oil companies are seeking “serious guarantees” from Washington before committing significant capital to Venezuela, highlighting the risks involved in operating in the country’s volatile political and regulatory environment.

U.S. inventory draw offers demand-side support

Adding some support to prices, U.S. government data released on Wednesday showed crude inventories fell by 3.8 million barrels in the week ended January 2, significantly exceeding expectations for a 1.2 million-barrel draw. The decline was also nearly double the 1.9 million-barrel draw recorded in the previous week.

The sharper-than-expected inventory draw helped reassure markets that demand in the world’s largest oil consumer remains relatively robust, despite concerns over slowing global growth and tighter financial conditions.

Key U.S. data in focus

Looking ahead, investor attention is turning to a series of important U.S. economic releases later this week, with December’s nonfarm payrolls report due on Friday seen as particularly influential. The data are expected to play a key role in shaping expectations around the Federal Reserve’s interest rate path, which in turn could affect the outlook for oil demand.

For now, crude markets remain caught between near-term support from inventory data and geopolitical risks, and longer-term fears that additional Venezuelan supply could exacerbate an already well-supplied global market.