Venezuela’s Maduro to appear in New York court as US capture comes under scrutiny

Shares of US oil companies jump

Shares of U.S. oil companies surged this morning, fueled by the prospect of accessing Venezuela’s vast oil reserves.

Shares of Chevron (CVX.N), the only U.S. major currently operating in Venezuela’s oil fields, climbed 6.5 percent in premarket trading, while refiners Marathon Petroleum (MPC.N), Phillips 66 (PSX.N), Valero Energy (VLO.N) and PBF Energy (PBF.N) rose between 4 and 11 percent, according to Reuters.

Venezuelan crude is a heavy crude with high sulfur content, making it suitable for the production of diesel and heavier fuels, although with lower margins compared to other grades, particularly those from the Middle East.

“This type of crude fits well with the configuration of U.S. Gulf Coast refineries that have historically been designed to process such grades,” Ahmad Assiri, research strategist at Pepperstone, told Reuters.

Shares of oil services companies, whose technology would be crucial to boosting Venezuela’s crude production, also climbed. Baker Hughes (BKR.O), Halliburton (HAL.N) and SLB (SLB.N) rose between 6.6 percent and nine percent.

Analysts caution, however, that a meaningful recovery would likely take time, given political uncertainty, declining infrastructure and years of underinvestment.