Crude prices climbed sharply on Thursday, reversing losses from the previous two sessions after U.S. data showed a much larger-than-expected decline in oil inventories, even as geopolitical developments surrounding Venezuela continued to shape market sentiment.
By 07:50 ET (12:50 GMT), Brent futures for March delivery were up 1.6% at $60.93 a barrel, while U.S. West Texas Intermediate crude also rose 1.6% to $56.90 a barrel. Both benchmarks had fallen more than 1% in each of the prior two trading days.
U.S. stockpiles post biggest draw in months
Support came from government figures released Wednesday indicating that U.S. crude inventories fell by 3.8 million barrels in the week ended January 2, far exceeding forecasts for a 1.2 million barrel decline and marking the largest weekly draw since late October.
The drop was nearly double the 1.9 million barrel reduction recorded the previous week, easing concerns over weakening demand and reinforcing confidence in consumption levels in the world’s largest oil-consuming economy.
Venezuela developments dominate headlines
Despite the inventory-driven bounce, attention remains firmly fixed on Venezuela. According to a Wall Street Journal report, U.S. President Donald Trump is considering a multi-year strategy to exert control over Venezuela’s oil sector, part of a broader effort to push crude prices toward his $50-a-barrel target.
The report said the administration is weighing measures to take control of state oil company Petróleos de Venezuela SA (PdVSA). Trump stated earlier this week that Venezuela would hand over between 30 million and 50 million barrels of oil to the United States, valued at up to $3 billion, shortly after U.S. forces captured Venezuelan President Nicolas Maduro.
U.S. oil companies are also being encouraged to expand operations in Venezuela, with Chevron (NYSE:CVX) seen as a key participant. Reuters reported that Chevron is in talks to broaden its license to operate in the country. Chevron remains the only U.S. oil major active in Venezuela, operating under special authorization that exempts it from the strictest sanctions.
Analysts at ING noted that “the U.S. Department of Energy said the U.S. has already begun marketing Venezuelan oil globally, while Trump’s energy secretary stated that the U.S. intends to control future sales of Venezuelan oil indefinitely. This intent to control Venezuelan oil exports is also clear with the blockade on sanctioned tankers still in place. In fact, the U.S. seized two further tankers yesterday.”
They added that “the control that the U.S. intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC.”
While a surge in Venezuelan production could eventually add to global supply and intensify concerns over an oil surplus in 2026, analysts cautioned that any meaningful increase would likely be delayed due to ongoing political instability. The Financial Times reported that U.S. energy companies are seeking “serious guarantees” from Washington before committing capital to the country.
Jobs data in focus
Beyond geopolitics, traders are also preparing for key U.S. economic releases, with December’s nonfarm payrolls report due Friday. The data is expected to play a central role in shaping interest rate expectations.
Lower interest rates tend to support economic activity and fuel consumption, which in turn can boost energy demand in the world’s largest economy.
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