Oil prices edged higher on Thursday, snapping a two-day losing streak after a sharper-than-expected decline in U.S. crude inventories encouraged some investors to return to the futures market. Traders also remained focused on ongoing political and supply developments involving Venezuela.
Brent crude futures rose by 38 cents, or 0.6%, to $60.34 per barrel, while U.S. West Texas Intermediate crude gained 37 cents, or 0.7%, to trade at $56.36 per barrel in early Asian hours.
The modest rebound followed steep losses earlier in the week, with both benchmarks dropping more than 1% on Wednesday. Market participants continue to price in abundant global supply for the year ahead, with analysts at Morgan Stanley estimating a surplus of up to 3 million barrels per day during the first half of 2026.
According to Mitsuru Muraishi of Fujitomi Securities, the recent pullback created an opportunity for short-term buying. However, he warned that oversupply concerns are likely to limit further gains. Muraishi added that while developments in Venezuela remain a key focus, the broader downward trend could persist, with WTI potentially slipping below $54.
Fresh data from the Energy Information Administration showed that U.S. crude inventories fell by 3.8 million barrels to 419.1 million barrels in the week ended January 2. This contrasted sharply with expectations from analysts surveyed by Reuters, who had forecast a modest inventory increase.
Geopolitical developments also influenced market sentiment. Senior officials in the United States said Washington must maintain long-term control over Venezuela’s oil sales and revenues to stabilize the country’s economy, rebuild its energy sector, and align it with U.S. strategic interests.
Oil major Chevron is reportedly in discussions with U.S. authorities to expand its operating license in Venezuela. Such a move would allow the company to boost crude exports to its refineries and supply additional buyers, according to sources familiar with the talks.
Meanwhile, U.S. authorities seized two oil tankers linked to Venezuela in the Atlantic Ocean, including one sailing under a Russian flag. The action forms part of President Donald Trump’s broader effort to reshape oil flows across the Americas and pressure Venezuela’s socialist government into closer alignment with Washington.
Earlier this week, the U.S. announced an agreement with Caracas granting access to as much as $2 billion worth of Venezuelan crude. Under the deal, Venezuela is expected to transfer between 30 million and 50 million barrels of sanctioned oil to the U.S., Trump said in a social media post.
Sources indicated that some shipments originally destined for China may need to be rerouted. Chinese independent refiners, which account for a large share of Venezuela’s exports to China, could turn to Iranian crude to offset any supply disruptions.
