London (AFP) – The oil market was jumpy on Monday after US forces captured the leader of oil-rich Venezuela, sparking speculation on the implications for future crude supplies. Having spiked in an initial reaction to the military operation to apprehend Nicolas Maduro in Caracas, oil prices quickly dropped again on expectations that Venezuela — which sits on about a fifth of the world’s oil reserves — will crank up production quickly, adding to an existing supply glut.
But then oil recovered again as investors realized that Venezuela is in no position to make a meaningful impact on oil supply in the short run, even with all the help that US President Donald Trump has promised. Despite Trump’s “obvious desire for US oil companies to ramp up activity in Venezuela, lower oil prices and political uncertainty will frustrate efforts to exploit its vast energy potential,” predicted David Oxley, chief climate and commodities economist at Capital Economics.
“It would take years, and massive investment, to bring Venezuela’s oil production back to pre-crisis levels,” said Ipek Ozkardeskaya, an analyst with Swissquote. Venezuela has the largest proven oil reserves in the world, at around 303 billion barrels, according to OPEC. Trump’s promise to rebuild Venezuela’s crude production capacity with the help of American companies meanwhile sent stocks in oil majors soaring. In early Wall Street business, Chevron was up nearly five percent, while Exxon rose by around 2.5 percent.
Safe-haven investments gold and silver rose on increased geopolitical risk in the wake of the US invasion. Prospects of more US interest-rate cuts this year and a booming technology sector meanwhile lent support to equity markets. The first full week of business for 2026 will see the release of key US jobs data that could play a role in the Federal Reserve’s decision-making on borrowing costs.
– Key figures at around 1435 GMT –
Brent North Sea Crude: UP 0.7 percent at $61.19 per barrel
West Texas Intermediate: UP 0.9 percent at $57.83 per barrel
New York – Dow: UP 0.7 percent at 48,704.34
London – FTSE 100: UP 0.4 percent at 9,986.36 points
Paris – CAC 40: UP 0.1 percent at 8,201.99
Frankfurt – DAX: UP 1.0 percent at 24,777.28
Tokyo – Nikkei 225: UP 3.0 percent at 51,832.80 (close)
Hong Kong – Hang Seng Index: FLAT at 26,347.24 (close)
Shanghai – Composite: UP 1.4 percent at 4,023.42 (close)
Euro/dollar: DOWN at $1.1680 from $1.1720 on Friday
Pound/dollar: DOWN at $1.3461 from $1.3460
Dollar/yen: DOWN at 156.73 yen from 156.85 yen
Euro/pound: DOWN at 86.77 pence from 87.07 pence
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© 2024 AFP
