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Oil Holds Biggest Gain in a Week as Venezuela and Glut in Focus - BLOOMBERG
(Bloomberg) -- Oil edged higher after the biggest gain in a week, as traders weighed geopolitical risks against persistent concerns about a global glut.
Brent was near $62 a barrel, after closing 1.7% higher in the previous session. Traders are continuing to digest the ouster of Venezuelan leader Nicolás Maduro, with companies set for talks with Washington regarding Venezeula’s energy sector. There are also simmering risks in the Middle East after Israel reiterated on Monday that it wouldn’t allow Iran to rebuild its ballistic missile program.
“I don’t perceive significantly higher prices almost regardless of what events happen with Iran, with Ukraine and with Venezuela,” Ben Luckock, global head of oil at Trafigura Group, told Bloomberg TV. He added that the barrels Venezuela is likely to return this year are “very, very few.”
The broader market is grappling with a swelling surplus and Venezuela only accounts for a small fraction of global output, meaning any disruption to the country’s exports is unlikely to have a sustained price impact. The glut has prompted Saudi Arabia to trim crude prices to Asia for a third month.
The surplus is expected to expand in the first half and reach its peak mid-year, according to Morgan Stanley, which cut its price forecasts for the first three quarters of 2026. Oil futures capped their biggest annual decline since 2020 last year, as OPEC+ and other producers added more barrels to the market.
Venezuela was once a major oil producer, but now accounts for less than 1% of global supplies after years of underinvestment left the country’s energy infrastructure in poor shape. Chevron Corp. is the only American major operating in the nation under special US permission.
US Energy Secretary Chris Wright plans to talk this week with oil-industry executives about reviving Venezeula’s energy sector, according to people familiar with the matter. President Donald Trump told NBC News the US may subsidize efforts to help rebuild it. Shares in American oil firms jumped Monday on the prospect for a revival of the nation’s energy sector.
A blockade on tankers and a build-up of US forces in the region had fueled speculation of escalating action against the energy-rich country. Hedge funds boosted bullish bets on crude to the most since November in the week before the US captured Maduro.
