Big Oil and oilfield services names also pulled back after Monday’s Venezuela-fueled rally.
- U.S. President Donald Trump said the oil from Venezuela will be sold at market prices, and he will control the money earned.
- He noted that he would be tasking Energy Secretary Chris Wright with securing oil from Venezuela for the U.S.
- WTI and Brent Crude futures closed down on Tuesday with losses extending into after-hours trading.
Developments around Venezuela have taken center stage for the energy sector, after U.S. President Donald Trump said the South American country would hand over between 30 million and 50 million barrels of oil to the United States, stoking fears of oversupply and pushing crude prices lower.
The Energy Select Sector SPDR Fund (XLE) and the United States Oil Fund ETF both traded more weakly in after-hours trading on Tuesday following the remarks.
“I am pleased to announce that 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,” Trump said in a post on his social media platform, Truth Social.
“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,” he added, noting that Energy Secretary Chris Wright has been tasked with executing the plan immediately. Trump said the oil would be transported via storage ships and unloaded directly at U.S. ports.
How Did Oil Prices React?
Oil prices initially jumped following the U.S. airstrike on OPEC-member Venezuela, but those gains quickly reversed. U.S. West Texas Intermediate crude closed down 2.04% on Tuesday, falling $1.19 to $57.13 a barrel, while Brent crude slipped 1.7% to $60.70 a barrel.
Wall Street remains concerned about a potential supply glut, especially as demand stays subdued. A Reuters report citing Morgan Stanley analysts noted that global oil demand likely grew by around 900,000 barrels per day last year, below the historical trend of about 1.2 million barrels per day.
Morgan Stanley also said OPEC supply rose by 1.6 million barrels per day, while non-OPEC supply increased by roughly 2.4 million barrels per day between the fourth quarters of 2024 and 2025.
Big Oil Pulls Back After Surge
Major oil companies such as Chevron, Exxon Mobil, and ConocoPhillips had surged on Monday following the capture of Venezuela’s President Nicolás Maduro and Trump’s comments about sending U.S. energy firms into the country to restart oil production.
Oilfield services companies SLB and Halliburton also posted substantial gains on Monday. However, those moves reversed on Tuesday, with all five stocks closing lower.
Chevron shares fell 4.5%, Exxon Mobil declined 3.4%, and ConocoPhillips slid 2.1% by Tuesday’s close. SLB edged lower, while Halliburton ended the session down 3.4%.
What Is Retail Thinking?
Retail sentiment on the United States Oil Fund ETF was in the ‘extremely bullish’ territory compared to ‘bearish’ a week ago, with message volumes at “extremely high” levels, according to data from Stocktwits.
Sentiment on the Energy Select Sector SPDR Fund also improved to ‘extremely bullish’ territory from ‘bearish’ a week ago, with message volumes at ‘extremely high’ levels.
Shares of ExxonMobil have gained over 11.3% in the last 12 months, while Chevron’s stock has jumped 4.6% for the same period. SLB’s stock has gained nearly 11% and Halliburton has seen a 11.1% increase in the past year.
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