West Texas Intermediate (WTI) crude oil prices are falling, currently around $55.90 per barrel. This decline is mainly due to worries about oversupply after the US decided to sell Venezuelan oil globally. This comes after the US military operation that captured Nicolás Maduro, allowing the US to control Venezuela’s oil exports and revenues. Venezuela possesses the largest proven crude oil reserves in the world, estimated at 303 billion barrels. The US plans to sell this oil, deposit the earnings in US banks, and manage oil sales indefinitely, which could boost Venezuelan oil production by hundreds of thousands of barrels daily.

Venezuela’s Oil Reserves

President Trump announced that Venezuela would sell between 30 million and 50 million barrels of oil to the US. Additionally, US officials seized a Russian-flagged oil tanker tied to Venezuelan exports, raising further geopolitical tensions. Data from the EIA revealed a drop in US crude inventories by 3.831 million barrels, which was more than the expected increase of 1.1 million barrels. However, the prospect of more Venezuelan oil entering the market kept WTI prices pressured. Factors like supply and demand, geopolitical events, and OPEC’s decisions continue to affect WTI oil prices. The US dollar’s value is also crucial, as oil trades mostly in this currency. Reflecting on the US’s intervention in Venezuela in early 2025, it caused a major shock to the oil supply situation. The news that the US would oversee Venezuelan oil sales led WTI prices to fall near $55 a barrel due to fears of oversupply. This event marked the beginning of a new market trend, which has had a year to develop. Over the past year, Venezuelan oil production has steadily increased, adding about 500,000 barrels per day to the global market, according to the latest IEA figures. In response, OPEC+ started production cuts in mid-2025 to avoid a price drop and stabilize the market. The balance between new Venezuelan supply and managed OPEC+ supply has become a key focus.

Market Trends and Predictions

As of early January 2026, WTI is trading in a delicate range around $72, significantly above its 2025 lows, but it still shows signs of weakness. Last week, the EIA’s report surprised many by indicating a crude inventory increase of 2.5 million barrels when a slight decrease was expected, pointing to a potential drop in global demand. Given this unexpected inventory rise, traders might consider preparing for short-term risks. Buying put options with a strike price near $70 could help guard against a potential decline driven by demand concerns. The market seems to be overlooking supply risks, focusing instead on the possibility of a global economic slowdown. The steady flow of Venezuelan oil has reduced the volatility typically seen with geopolitical events. In this context, selling call options at higher strike prices around $78 to $80 could be a smart way to gain premium income. We believe that the upside is limited as long as the US maintains stable operations in Venezuela and economic challenges remain. We need to keep an eye on the upcoming OPEC+ meeting in March, where they will discuss whether to tighten production cuts to balance the Venezuelan oil. Any comments from US officials regarding Venezuela’s oil infrastructure could also lead to big price changes. For now, the most likely path appears to be sideways or lower until a new catalyst emerges. Create your live VT Markets account and start trading now.

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