EOG Resources: Higher Venezuelan output and oversupply are weighing down on shale oil prices

Ann Janssen, finance chief at EOG Resources, said that on Wednesday oversupply from Venezuela and possibly higher production are pushing down oil prices. This trend is likely to continue for several more quarters.

Brent crude futures fell about 0.6% to $60.30 per barrel as investors reacted after U.S. president Donald Trump announced that his country had "reached an accord" to import up $2 billion of Venezuelan crude. This move is expected to increase supplies to the?largest consumer of oil in the world.

Trump announced over the weekend that he would temporarily place Venezuela under American?control, after U.S. troops ousted President Nicolas Maduro and?unlocked its vast oil reserves.

Trump's top priority is to increase crude production from Venezuela, according to sources cited by the Washington Post on Wednesday. Trump is due to meet the heads of the major oil companies on Friday at the White House.

Janssen said that the ongoing buildout of the liquefied gas infrastructure would eventually lead to an oversupply and impact the natural gas price.

Since the Russian invasion of Ukraine in '2022, global demand for LNG has risen, driving buyers from Europe and Asia into long-term supply agreements with U.S. suppliers.

Janssen stated that the U.S. producer of shale oil and gas expects to invest about $6.5 billion on capital projects by 2026. (Reporting and editing by Shilpa Majumdar in Bengaluru, Katha Kalia in Bengaluru)

(source: Reuters)