Oil Prices Rebound in Asia as Inventory Draws Offset Venezuela Supply Concerns

Oil prices edged higher during Asian trading on Thursday, recovering some of the ground lost over the past two sessions as traders reacted to stronger-than-expected U.S. inventory data and lingering geopolitical risks. The rebound came despite ongoing concerns that increased Venezuelan oil supplies could weigh on global markets in the months ahead.

Brent crude futures for March delivery rose about 0.7% to trade near $60.38 per barrel, while West Texas Intermediate (WTI) crude futures also gained 0.7% to around $56.28 per barrel in early Asian hours. Both benchmarks had fallen more than 1% in each of the previous two sessions, pressured by fears of oversupply and uncertainty surrounding U.S.-Venezuela oil negotiations.

Market attention remains firmly on developments involving Venezuela after U.S. President Donald Trump said the country would hand over between 30 million and 50 million barrels of oil to Washington, a deal estimated to be worth up to $3 billion. The announcement followed the capture of Venezuelan President Nicolas Maduro by U.S. forces, adding another layer of political complexity to the oil market outlook. Trump has reportedly encouraged U.S. oil companies to expand operations in Venezuela, with Chevron emerging as a key player. According to media reports, Chevron is in talks to broaden its license to operate in the country, where it is currently the only major U.S. oil producer with special authorization exempting it from strict sanctions.

While markets worry that higher Venezuelan output could worsen a potential global oil glut expected in 2026, analysts caution that any meaningful increase in production will likely take time. Political instability and the need for firm guarantees from Washington are expected to slow investment decisions by U.S. energy firms.

Supporting prices in the near term, U.S. government data showed crude oil inventories fell by 3.8 million barrels in the first week of January, significantly exceeding expectations for a 1.2 million barrel draw. The larger decline reinforced confidence in resilient fuel demand in the world’s largest oil consumer. Investors are now watching key U.S. economic data, including December’s nonfarm payrolls report, which could influence interest rate expectations and broader commodity markets.