Oil prices climbed on Thursday, rebounding after two consecutive sessions of losses, supported by a larger-than-expected decline in U.S. crude inventories. Still, investor attention remained firmly on developments in Venezuela.
By 07:50 ET (12:50 GMT), Brent crude futures for March delivery were up 1.6% at $60.93 a barrel, while U.S. West Texas Intermediate crude also gained 1.6% to $56.90 a barrel. Both benchmarks had fallen more than 1% in each of the previous two sessions.
U.S. oil inventories post sharp draw
Sentiment improved after U.S. government data released on Wednesday showed domestic oil inventories fell by 3.8 million barrels in the week ended January 2. This exceeded expectations for a 1.2 million-barrel draw and marked the largest weekly decline since late October.
The drop was also nearly double the 1.9 million-barrel reduction recorded the prior week, easing concerns about demand and suggesting consumption remains resilient in the world’s largest oil consumer.
Venezuela developments remain in focus
Despite the inventory-driven rebound, the situation in Venezuela continues to dominate market discussions. According to a report from The Wall Street Journal, U.S. President Donald Trump is planning a multi-year initiative to exert control over Venezuela’s oil industry, aiming to support his $50-per-barrel oil price target.
The administration is reportedly considering oversight of Venezuela’s state-owned producer, Petróleos de Venezuela SA (PdVSA). Trump said earlier this week that Venezuela would transfer between 30 million and 50 million barrels of oil to Washington, just days after U.S. forces captured Venezuelan President Nicolas Maduro.
U.S. officials have also encouraged American oil firms to expand operations in Venezuela, with Chevron seen as a leading participant. Reuters reported that Chevron is in talks to broaden its license to operate in the country. The company is currently the only major U.S. oil producer active in Venezuela, operating under special authorization that exempts it from strict sanctions.
Analysts at ING noted that the U.S. Department of Energy has already begun marketing Venezuelan crude globally, while U.S. officials have indicated an intention to control future oil sales indefinitely. They also highlighted that sanctions enforcement remains in place, with two additional tankers reportedly seized this week.
ING added that Washington’s plans could raise questions about Venezuela’s future role within OPEC, particularly if production were to rise sharply. Any increase in Venezuelan output could add to global supply at a time when concerns about a potential oil glut in 2026 are growing. However, analysts cautioned that higher production is unlikely in the near term due to political instability following the U.S. intervention.
Separately, the Financial Times reported that U.S. oil companies are seeking firm guarantees from Washington before committing significant investments in Venezuela.
Payrolls data also in focus
Beyond geopolitics, traders are also watching upcoming U.S. economic data, particularly the December nonfarm payrolls report due on Friday. The figures are expected to influence interest rate expectations, with lower rates typically supporting economic activity and boosting energy demand in the U.S.
