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Oil fluctuated as investors weighed the fallout from the capture of Venezuelan President Nicol\u00e1s Maduro by US forces on global crude supply and its wider impact on the nation\u2019s energy sector.<\/p>\n
Brent fell as much as 1.2% at the open before clawing back losses to trade near $61 a barrel. West Texas Intermediate was around $57. Despite the upheaval over the weekend in Venezuela, the OPEC producer accounts for a small fraction of global supply and the market is already grappling with a swelling glut.<\/p>\n
\u201cAny short-term disruption to Venezuelan output can easily be offset by increased production elsewhere,\u201d Neil Shearing, group chief economist for Capital Economics, wrote in a note. \u201cWe expect global supply growth over the next year or so to push oil prices down towards $50.\u201d<\/p>\n
Venezuela was once an oil-producing powerhouse but the country\u2019s output has tumbled over the past two decades and now represents less than 1% of global supplies, which is mostly exported to China. The market is facing a big surplus this year as OPEC+ and others add more barrels as demand softens.<\/p>\n
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On Sunday, OPEC+ stuck with plans to pause supply hikes in the first quarter. The group, led by Saudi Arabia and Russia, didn\u2019t discuss Venezuela during the 10-minute video conference, according to delegates, who added it\u2019s premature to gauge how to respond to the unfolding situation.<\/p>\n
Despite the US attacks on Saturday, Venezuela\u2019s oil infrastructure including Jose port and Amuay refinery and main producing areas in the Orinoco Belt wasn\u2019t affected, according to people familiar with the matter. Still, recent American pressure on Maduro\u2019s regime, including the seizure of tankers, have forced the country to start shutting some oil wells.<\/p>\n
President Donald Trump said on Saturday that sanctions on the nation\u2019s industry will remain in place, but added US companies will help rebuild the sector and revive output, in what is likely to be a lengthy process. He told reporters on Monday that companies wanted to go into Venezuela \u201cbadly.\u201d<\/p>\n
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\u201cUS investment and any real sanctions relief take time, and barrels don\u2019t come back overnight,\u201d said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. \u201cFor now it still feels like the surplus is doing most of the talking and outweighing geopolitics, which keeps a lid on prices.\u201d<\/p>\n
US Secretary of State Marco Rubio said on Sunday the US will use leverage over oil to force further change in the Latin American country. Delcy Rodr\u00edguez, the acting president of Venezuela, asked the US to work with her country, striking a more conciliatory tone after her initial outrage at the capture of Maduro.<\/p>\n
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