Market News
Oil dips on ample supply outlook, market weighs Venezuelan output
BY Seher Daree, Anushree Mukherjee and Emily Chow
Key Points
- US to meet oil executives to discuss Venezuelan production boost
- Analysts predict sufficient supply by 2026 despite uncertainties
- Reliance Industries halts Russian crude deliveries for January
LONDON, Jan 6 (Reuters) – Oil prices edged slightly higher on Tuesday as the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude output following the U.S. capture of President Nicolas Maduro.
Brent crude futures LCOc1 rose 0.5%, or 30 cents, to $62.06 a barrel by 0930 GMT while U.S. West Texas Intermediate crude CLc1 was at $58.57 a barrel, up 0.4%, or 25 cents.
“It is premature to evaluate the impact of Nicolas Maduro’s capture on the oil balance. What seems obvious, nonetheless, is that oil supply will be sufficient in 2026, with or without an increase in production from the OPEC member,” said PVM Oil analyst Tamas Varga.
Market participants polled by Reuters in December said they expected oil prices to be under pressure in 2026 due to growing supply and weak demand.
ADDITIONAL PRESSURE ON PRICES AFTER MADURO CAPTURE?
Price pressure could be exacerbated by the U.S. capture of Venezuela’s leader on Saturday, increasing the chances of an end to a U.S. embargo on Venezuelan oil and potentially leading to higher output.
“We estimate only 300,000 barrels per day of additional supply within the next two to three years on limited incremental spending. Some of this can be financed organically by PDVSA but international capital would need to be committed to make 3 million bpd by 2040 possible,” said Janiv Shah, analyst at Rystad.
The administration of U.S. President Donald Trump plans to meet U.S. oil executives this week to discuss boosting Venezuelan oil production, a person familiar with the matter told Reuters.
Venezuela is a founding member of the Organization of the Petroleum Exporting Countries and has the world’s largest oil reserves at about 303 billion barrels. However, its oil sector has long been in decline due in part to underinvestment and U.S. sanctions.
Its average output last year was 1.1 million barrels per day.
VENEZUELA OUTPUT MAY CLIMB WITH US INVESTMENT – ANALYSTS
Oil analysts said Venezuelan output could increase up to half a million barrels a day over the next two years with political stability and U.S. investment.
In the wider market, Reliance Industries said on Tuesday it was not expecting any Russian crude oil deliveries in January, a move that could sharply cut India’s Russian oil imports during the month to the lowest in years.
The statement comes after Trump on Sunday warned that the U.S. could further raise import tariffs on India over its Russian oil purchases.
