WTI Oil prices face difficulty surpassing $56.50 as worries about excess supply persist

WTI Oil Prices Slide Amid US-Venezuela Import Agreement

US benchmark WTI crude oil continues to hover near its lowest levels in three weeks, falling below $56.00 earlier on Wednesday. This decline follows an unexpected agreement allowing the US to import crude oil from Venezuela, raising fears of an oversupplied market.

On Tuesday, President Donald Trump revealed that the US would be purchasing between 30 and 50 million barrels from Venezuela’s previously sanctioned oil reserves. This announcement has contributed to a surge in global crude supply at a time when demand is weakening due to economic slowdowns in several leading economies.

Following the news of the US-Venezuela deal, WTI prices tumbled by more than $2, dipping under $57.00 for the first time since mid-December before partially recovering on Wednesday. Despite this rebound, prices have struggled to rise above $56.60, as traders look ahead to crucial US employment data.

According to figures from the American Petroleum Institute (API) released Tuesday, US oil inventories fell by 2.8 million barrels during the last week of December, defying forecasts that had predicted a 12 million barrel increase.

Meanwhile, OPEC+—which includes many of the world’s top crude exporters—opted over the weekend to maintain current production levels during a brief meeting that largely sidestepped growing internal disputes. This move, however, has offered little support to oil prices.