Oil prices swing after Trump's Venezuela raid as investors eye global supply

• Oil prices swung between gains and losses in the first trading since the US strike on Venezuela.
• The US captured Venezuelan President Maduro, and President Trump touted billions in potential oil investment.
• Any rebound in Venezuelan production could deepen an ongoing decline in oil prices.

Oil futures fluctuated between gains and losses on Sunday evening in the first trading since the US captured Venezuelan President Nicolas Maduro over the weekend.

US benchmark West Texas Intermediate crude oil futures fell as much as 1.4% in the opening hour of trading before recovering into positive territory. They sat 0.5% higher at $57.61 at 8:03 p.m. on Sunday.

International benchmark Brench crude futures climbed 0.5% to $61.08 a barrel after falling as much as 1.4%.

The oil market has been under pressure, with crude prices falling 20% last year. A main issue facing the market is an oversupply of global crude. It's been a focus of OPEC+, which also over the weekend said it will refrain from pumping new oil during the first quarter.

Despite Venezuela's vast oil reserves — estimated at about one-fifth of the global total — the country's output accounts for less than 1% of global daily oil production, reflecting years of aging infrastructure and the impact of sanctions.

Against that backdrop, President Donald Trump said on Saturday that US oil companies will invest billions of dollars in Venezuela.

If Venezuelan oil production does pick up, analysts say it could take time.

"Higher recovery rates of heavy Venezuela oil will likely require financial and time investments in oil-processing upgraders and improvements in operational efficiencies, power availability, and oil transporting infrastructure," wrote analysts at Goldman Sachs in a note on Sunday.

Venezuela produced around 3 million barrels a day of oil at its peak in the mid-2000s.

Even before the US captured Maduro, Venezuela's oil exports had already come under pressure after Trump imposed a blockade of sanctioned oil tankers entering or leaving Venezuelan waters last month. The blockade remains in place.

Goldman Sachs said the latest developments increase the likelihood of a shift toward a policy environment more supportive of oil investment, even as short-term changes to oil flows — including both modest increases and further disruptions — remain possible.

The developments are negative for oil prices over the long run, as any sustained increase in Venezuelan output would add to already ample supply at a time of slowing demand growth, according to Goldman.

"Production may edge up slightly in the short-run, including in a scenario with a US-supported government and full sanctions relief. Alternatively, disruptions to Venezuela oil deliveries could continue and/or intensify in the short-run, for instance because Maduro's cabinet has asserted its control," wrote Goldman's analysts.

Goldman estimates WTI and Brent to average $51 a barrel and $58 a barrel, respectively, should Venezuelan crude production fall by 400,000 barrels a day by the end of 2026.

Should the country's crude production rise by 400,000 barrels a day instead, WTI and Brent are expected to average $50 a barrel and $54 a barrel, respectively, in 2026, the analysts added.