Oil prices fell on Wednesday after US President Donald Trump said Venezuela would hand over between 30 and 50 million barrels of sanctioned oil to the United States.
U.S. West Texas Intermediate crude fell 85 cents, or 1.49%, to $56.28 a barrel, while Brent crude futures dropped 65 cents, or 1.07%, to $60.05 a barrel.
Both benchmark crudes had fallen by more than a dollar in the previous trading session, as the market weighed expectations of ample global supply this year against uncertainty over Venezuelan oil production following the US arrest of President Nicolas Maduro.
“This oil will be sold at the market price, and I, as President of the United States, will control these funds to ensure they are used for the benefit of the people of Venezuela and the United States,” Trump said in a social media post on Tuesday.
Tina Teng, a market analyst at Momo ANZ, said Trump's post shows he prefers increasing supply to limiting it, which reinforces concerns about oversupply in the global market.
Two sources told Reuters yesterday that the agreement reached between Caracas and Washington may, in its initial stages, require redirecting shipments that were originally destined for China.
Venezuela was selling its main crude at a discount of nearly $22 a barrel to the price of Brent crude for delivery to Venezuelan ports, giving the deal an estimated value of $1.9 billion.
Morgan Stanley analysts estimated that the oil market could see a surplus of up to three million barrels per day in the first half of 2026, based on weak demand growth over the past year and increased supply from OPEC and non-OPEC producers.
Meanwhile, U.S. crude oil inventories fell last week, while fuel stocks rose, according to market sources citing data released yesterday by the American Petroleum Institute. The data showed a decrease of approximately 2.77 million barrels in crude oil inventories.
Official US government statistics on US oil inventories are due to be released at 15:30 GMT on Wednesday.
Eight analysts polled by Reuters before the report was released estimated that crude oil inventories rose by an average of about 500,000 barrels in the week ending January 2.
