• WTI extends losses as the US moves to sell Venezuelan Oil, stoking fresh oversupply concerns.
• Markets digest sweeping US actions in Venezuela, including plans to control Oil exports and revenues.
• EIA data shows a sharp inventory draw, but prices struggle to find support.

West Texas Intermediate (WTI) extends its decline for a second straight day on Wednesday, as oversupply concerns deepen after the United States (US) said it will sell Venezuelan Oil on the global market. At the time of writing, WTI trades around $55.90, down nearly 1.5% on the day, clinging to levels last seen on December 19 as bearish momentum persists.

Over the weekend, the US military carried out a large-scale strike in Venezuela, capturing ousted President Nicolás Maduro and his wife in Caracas before flying them to New York to face federal charges. Following the operation, US President Donald Trump said the US would temporarily “run” Venezuela, including overseeing its Oil sector.

It is worth noting that Venezuela holds the world’s largest proven Crude Oil reserves at roughly 303 billion barrels.

In the latest developments, White House Press Secretary Karoline Leavitt said Oil would arrive in the US from Venezuela very soon, adding that Washington has already begun marketing the crude. She also noted that proceeds from Venezuelan Oil sales will settle in US banks, with the funds to be disbursed at the discretion of the US government.

Meanwhile, US Energy Secretary Chris Wright said Washington plans to oversee Venezuelan Oil sales “indefinitely,” speaking at a Goldman Sachs energy conference. “If we control the flow of oil and the flow of the cash that comes from those sales, we have large leverage,” Wright said, adding that Venezuela’s crude production could be increased by several hundred thousand barrels a day in the short to medium term.

This comes after President Trump said late Tuesday that Venezuela would turn over between 30 million and 50 million barrels of Oil to the US at market prices, with proceeds intended to benefit both nations. Trump is also set to meet with US Oil executives on Friday at the White House, according to people familiar with the matter.

Adding to the geopolitical backdrop, US authorities on Wednesday seized a Russian-flagged Oil tanker in the North Atlantic that was allegedly linked to Venezuelan crude exports, according to US officials. Russia’s Transport Ministry said no state has the right to use force against vessels duly registered in other states’ jurisdictions.

On the data front, the latest Energy Information Administration (EIA) report showed US crude inventories fell by 3.831 million barrels, compared with market expectations for a 1.1 million-barrel build and following the prior week’s 1.934 million-barrel draw. However, the larger-than-expected decline did little to support prices, as traders remained focused on the prospect of additional Venezuelan barrels entering the market.