Oil prices extended losses on Wednesday after United States President Donald Trump announced that Venezuela would hand over millions of barrels of oil to the United States, while global equity markets recorded mixed performances following a record-breaking start to the year.
Crude prices have been highly volatile since the US president ordered the removal of Venezuelan leader Nicolas Maduro on Saturday and declared that Washington would oversee the country, demanding “total access” to its oil resources.
However, both major oil benchmarks fell by more than one per cent on Wednesday, after dropping between 1.7 and 2.0 per cent on Tuesday, following Trump’s latest announcement.
“The Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” he wrote on his Truth Social platform.
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“This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States.”
Analysts said the planned shipments reduced the risk of Venezuela cutting production due to limited storage capacity, easing immediate supply concerns. They, however, noted that the broader outlook for oil prices remained bearish.
The development comes as the global crude market remains well supplied after OPEC+ agreed to increase output. Although Venezuela holds roughly a fifth of the world’s oil reserves, analysts cautioned that any rapid increase in production would be constrained by ageing infrastructure, low prices and ongoing political uncertainty.
Equity markets were mixed after a strong start to the year that has seen Seoul, London and New York reach record highs, driven largely by sustained investor interest in artificial intelligence-related stocks.
South Korea’s Kospi index continued to climb on Wednesday, while markets in Shanghai, Sydney, Wellington, Manila and Jakarta also closed higher.
In contrast, Hong Kong fell by more than one per cent, with losses also recorded in Singapore, Taipei and Mumbai. Tokyo declined by over one per cent after China imposed stricter export controls on goods sent to Japan that could have military applications. Bangkok ended the session flat.
Despite growing geopolitical tensions, analysts remain optimistic about equity markets this year.
“Participants remained squarely focused on what remains a robust bull case of resilient economic growth and robust earnings growth, largely in keeping with that which powered the market higher last year,” wrote Michael Brown of Pepperstone. He pointed to “expectations for considerably looser monetary and fiscal backdrops through the next twelve months.”
“My view remains that the ‘path of least resistance’ continues to lead to the upside, and that any dips, were they to occur, continue to represent buying opportunities.”
(AFP)