Oil prices are moving higher as investors weigh a return of Venezuelan supply to an already oversupplied market. After years of decline, Venezuela is reappearing on the radar as a potential medium-term source of additional crude because the political and regulatory environment around its oil exports may be about to change.
This renewed focus comes at a time when global inventories are elevated, and production from the United States, Brazil, and others is expected to remain steady or increase. Even so, Brent crude has climbed above 62 dollars, and WTI is following suit, as traders begin to reassess how the medium-term supply picture could evolve.
The recent arrest of Venezuelan leader Nicolás Maduro has opened the door to a possible relaxation of U.S. sanctions. If that materialises, it would mark the first meaningful pathway in years for foreign capital and technical expertise to re-engage with Venezuela’s ageing but resource-rich oil infrastructure.
Sintana Energy Inc (TSX-V:SEI, OTCQX:SEUSF) is a public oil and natural gas exploration company listed on the Toronto Venture Exchange.
