2026-01-05 11:56

Trump administration plans to meet with oil companies this week Venezuela has world's largest reserves Production fell after nationalization, sanctions Jan 5 (Reuters) - U.S. oil companies' shares closed higher on Monday, on investor optimism about potential access to Venezuela's vast oil reserves after President Donald Trump said the United States would take control of the South American nation following the arrest of its president Nicolas Maduro. Venezuela holds the world's largest oil reserves, but production plummeted in recent decades due to mismanagement, limited foreign investment following the nationalization of its oil industry and sanctions. Sign up here. The Trump administration plans to meet with executives from U.S. oil companies later this week to discuss boosting Venezuelan oil production, according to a source familiar with the matter. The meetings are crucial to the administration's hopes of getting top U.S. oil companies back into the South American nation after its government, nearly two decades ago, took control of U.S.-led energy operations there. The Trump administration has told U.S. oil executives in recent weeks that they would need to return to Venezuela quickly and invest significant capital in the country to revive the damaged oil industry if they wanted compensation for assets expropriated by Venezuela two decades ago, Reuters previously reported. Shares of Chevron (CVX.N) , opens new tab, the only U.S. major currently operating in Venezuela's oil fields, ended 5% higher. Meanwhile, U.S. refiners Marathon Petroleum (MPC.N) , opens new tab, Phillips 66 (PSX.N) , opens new tab, PBF Energy (PBF.N) , opens new tab and Valero Energy (VLO.N) , opens new tab were up between 3.4% and 9.3%. Oil prices settled up $1 a barrel, with analysts noting that in a global market with plentiful supply, any further disruption to Venezuela's exports would have little immediate impact on prices. Trump has said that the embargo on all Venezuelan oil exports would stay fully in effect for now. Venezuelan crude is a heavy sour with high sulfur content, making it suitable for producing diesel and heavier fuels, albeit at lower margins compared with other grades, particularly those from the Middle East. "This type of crude aligns well with the configuration of U.S. Gulf Coast refineries which were historically designed to process such grades," said Ahmad Assiri, research strategist at Pepperstone. Chevron's existing presence in Venezuela under a U.S. waiver has positioned it as a potential early beneficiary of any policy shift, while refiners stand to gain from increased availability of heavy crude closer to home. RETURN OF ASSETS The U.S. action could also pave the way for the return of assets seized by Venezuela in 2007 under late leader Hugo Chavez, analysts at J.P. Morgan said. They said ConocoPhillips (COP.N) , opens new tab and Exxon Mobil (XOM.N) , opens new tab have significant arbitration awards pending, which have a higher chance of recovery. "In total, ConocoPhillips has outstanding claims approaching $10 billion, while Exxon's outstanding damages appear to be in the $2 billion range against their original claims that exceeded $15 billion," the analysts said. Shares reflected the optimism, with Exxon Mobil (XOM.N) , opens new tab and ConocoPhillips (COP.N) , opens new tab adding more than 2% each. Shares of oilfield services firms, whose technology would be crucial to boosting Venezuela's crude production, also climbed. Baker Hughes (BKR.O) , opens new tab, Halliburton (HAL.N) , opens new tab and SLB (SLB.N) , opens new tab rose between 4% and 9%. Still, analysts cautioned that any meaningful recovery would likely take time, given political uncertainty, infrastructure decay and years of underinvestment. Venezuela was producing as much as 3.5 million barrels per day (bpd) in the 1970s, accounting for more than 7% of global output. Production slid below 2 million bpd in the 2010s and averaged about 1.1 million bpd last year, or roughly 1% of global supply. https://www.reuters.com/business/energy/chevron-us-refiners-shares-surge-after-trumps-move-toward-venezuela-oil-2026-01-05/

2026-01-05 11:32

OSLO, Jan 5 (Reuters) - Latvian police have found no evidence linking a ship docked in the port of Liepaja to damage to an underwater telecoms cable in the Baltic Sea but is investigating the incident further, authorities said on Monday. The Baltic Sea region is on high alert after a string of power cable, telecom link and gas pipeline outages since Russia invaded Ukraine in 2022, and the NATO military alliance has boosted its presence with frigates, aircraft and naval drones. Sign up here. The latest cable outage occurred on Friday near Liepaja and investigators on Sunday said they had boarded a ship and initiated criminal proceedings, although they did not name the vessel. INSPECTED SHIP AND ANCHOR The incident occurred after Finnish police on December 31 seized a cargo vessel en route from Russia to Israel on suspicion of sabotaging an undersea telecoms cable running across the Gulf of Finland to Estonia by dragging its anchor. MarineTraffic vessel tracking data show four ships crossing the Lithuania-Latvia cable on their way to Liepaja port on January 2, when the damage was first discovered. Three of those ships remained in the port on Monday. Latvian police said on Monday they had inspected a ship at Liepaja, including its anchor, as well as technical equipment and logs, and that the crew had voluntarily cooperated with the investigation. "At present, the information obtained in the criminal case does not indicate a connection of the specific ship with the damage to the optical cable," a national police statement said. Neighbouring Lithuania's National Crisis Management Centre said on Sunday the cable ran from Sventoji in Lithuania to Liepaja, two coastal towns some 65 km (40 miles) apart, and that it was not immediately clear what caused the outage. https://www.reuters.com/world/latvia-found-no-evidence-linking-vessel-underwater-cable-damage-police-say-2026-01-05/

2026-01-05 11:27

Oil prices rise on uncertainty over Venezuela's oil flow changes US did not consult oil firms before capturing Maduro Investors see rise in geopolitical risk in Colombia, Iran HOUSTON, Jan 5 (Reuters) - Oil prices settled up $1 a barrel on Monday as traders assessed the possible impact on crude flows from Venezuela, home to the world's largest oil reserves, following the U.S. capture of Venezuelan President Nicolas Maduro. Brent crude futures settled up $1.01 or 1.66%, at $61.76 a barrel . U.S. West Texas Intermediate crude settled up $1 or 1.74%, to $58.32. Sign up here. Both benchmarks rose more than $1 in late morning trade after falling more than $1 earlier in a choppy session, as investors digested news of Maduro's capture and that Washington would take control of the OPEC member whose crude exports had been under a U.S. embargo that remains in place. "The unknown for the oil market is how oil flows from Venezuela will change due to U.S. actions," Aegis Hedging analysts said in a note. The Trump administration did not consult with oil companies Exxon Mobil (XOM.N) , opens new tab ConocoPhillips (COP.N) , opens new tab or Chevron Corp (CVX.N) , opens new tab about Venezuela before or after U.S. forces captured Maduro, according to four oil industry executives familiar with the matter, but meetings are now planned for later this week. "I don't think you're going to see any company other than Chevron, who's already there you know, commit to developing this resource," said one of the executives. Venezuelan oil output has plummeted in recent decades, curbed by mismanagement and a lack of foreign investment after the nationalisation of oil operations in the 2000s. Output averaged about 1 million barrels per day last year, equating to about 1% of global production. Venezuela's acting president offered on Sunday to cooperate with the U.S. "I expect the naval attack and blockade to be lifted and, eventually, sanctions to be lifted, allowing much, if not all, of the Venezuelan oil stuck at sea and in bonded storage to become available to the market," said Simon Wong, portfolio manager at Gabelli Funds, adding that it will take some time for Venezuela to increase production. About a dozen oil tankers loaded with and fuel have left the country's waters since the start of the year in apparent defiance of the U.S. government's blockade on exports, according to documents seen by Reuters and industry sources, including monitoring service TankerTrackers.com. WIDER GEOPOLITICAL RISKS U.S. President Donald Trump also raised the possibility of further U.S. interventions, suggesting Colombia and Mexico could face military action if they did not reduce the flow of illicit drugs. Analysts are also awaiting Iran's reaction to Trump's threat to intervene in a crackdown on protests in the OPEC producer. "There's clearly more geopolitical risk now," Simon Lack, portfolio manager of the Catalyst Energy Infrastructure Fund, said in a note. "There's still very low but rising risk for U.S.-backed regime change in Colombia or even Iran," Lack added. Elsewhere, the Organization of the Petroleum Exporting Countries and its allies decided to maintain their output on Sunday. https://www.reuters.com/business/energy/oil-prices-slip-ample-supply-despite-political-turmoil-venezuela-2026-01-04/

2026-01-05 11:20

TOKYO, Jan 5 (Reuters) - Japan's Chubu Electric Power (9502.T) , opens new tab said on Monday it might have used a different method than explained to regulators to select representative seismic waves during the review of two reactors at its Hamaoka nuclear power station in central Japan. The discrepancy could "significantly impact" the regulatory review of the central Japan plant, the utility said in a statement. Sign up here. "We view this as an extremely serious matter that could undermine trust in our nuclear power business by our stakeholders, including the local community, and potentially shake the very foundations of these operations," the company said. It added that a third-party committee will be established to investigate. Chubu Electric is currently undergoing a review by the Nuclear Regulation Authority to restart Hamaoka's No. 3 and No. 4 reactors. The discrepancy in the seismic evaluation came just as Tokyo Electric Power's (9501.T) , opens new tab Kashiwazaki-Kariwa nuclear power plant and Hokkaido Electric Power's (9509.T) , opens new tab Tomari nuclear plant had secured approval from local communities and were moving toward restarts. This could dampen momentum to rebuild trust in Japan's nuclear power sector after it was dented by the 2011 Fukushima Daiichi disaster. The industry ministry said it had requested that Chubu Electric thoroughly investigate the facts and circumstances of the seismic evaluation incident and report its findings. It also demanded that the company identify and analyse the root causes, compile effective measures to prevent recurrence, and report on the existence of other similar incidents. https://www.reuters.com/business/energy/japans-chubu-electric-flags-discrepancy-seismic-evaluation-hamaoka-nuclear-plant-2026-01-05/

2026-01-05 11:08

Jan 5 (Reuters) - Global investors will actively seek opportunities this year in undervalued pockets of financial markets as growing concerns over an AI bubble push traders to look beyond highly valued technology stocks, according to several analysts. U.S. stocks were volatile in 2025, plunging to near bear market territory in April following President Donald Trump's sweeping tariffs before eventually rebounding to record highs. Sign up here. The upward momentum is expected to continue in 2026, analysts said, though investors may have to get selective about the assets they pick. "This environment is ripe for active investing," strategists at BlackRock Investment Institute said. Metal prices were the standout winners in 2025 as the dollar slumped on expectations of interest rate cuts by the Federal Reserve, which also boosted emerging market assets. But strategists are betting on a few other asset classes to gain traction this year. SMALL CAP STOCKS After years on the sidelines, U.S. small caps may return to the spotlight as earnings prospects improve and borrowing costs fall. "The big difference going into 2026 is that we finally are seeing earnings growth come back into small caps," said Oren Shiran, portfolio manager at Lazard Asset Management. Traders expect two 25-basis-point cuts from the U.S. central bank in 2026, according to estimates compiled by LSEG. Small cap companies typically carry higher debt, so they are among the first to benefit when interest rates move lower. Jefferies equity strategist Steven DeSanctis expects the Russell 2000 index (.RUT) , opens new tab, which tracks small cap stocks, to climb to 2,825 points by the end of 2026, marking a near 14% gain from 2025. GOLD Gold's historic run in 2025 made it the best year for the yellow metal since the 1979 oil crisis. J.P. Morgan and Bank of America forecast gold prices to hit $5,000 per ounce this year, compared with $4,314.12 in 2025. Analysts at the Wells Fargo Investment Institute expect favorable conditions to persist, but said the gains could come at a more measured pace. Another source of support could come from buying by central banks, which have been diversifying their reserves beyond dollar-denominated assets. HEALTHCARE AND FINANCIALS Healthcare could be one of the standout sectors, powered by a wave of policy boosts. Morgan Stanley said the growing reach of weight-loss drugs could boost the industry. Financials, particularly banks, are also expected to outperform as M&A activity accelerates and loan growth rebounds. The sector's valuation remains attractive, supported by deregulation and AI-driven efficiency gains, with mid-cap banks offering compelling early-cycle opportunities, Morgan Stanley said. CURRENCIES The U.S. dollar is poised for another bout of weakness in 2026, analysts said, as the Fed is expected to cut interest rates to cushion a cooling labor market. Political uncertainty, including the appointment of a new Fed chair, is also seen adding to the volatility. Any selling would increase the appeal of alternatives in emerging market currencies such as China's yuan and Brazil's real , with currency moves increasingly shaped by diverging policy paths. The Czech crown could get a fresh boost from the Czech National Bank's rate hikes, ING economists said. Meanwhile, commodity-linked currencies such as the Australian dollar and the New Zealand dollar could also benefit from an improving global growth outlook, MUFG analysts wrote. Among G7 peers, the euro looks set to draw support from fiscal stimulus while Japan's yen could remain vulnerable in the near term but recover, MUFG said. EMERGING MARKETS Emerging markets are expected to sustain strong inflows due to a weaker U.S. dollar and relatively benign valuations. "Emerging markets have become less volatile than developed markets," strategists at BofA Global said. "There is too much focus on the fact that emerging market growth is not as high as in the 'good old times'. That's true, but then again, macro stability indicators are better than in a long time." However, domestic politics could throw a spanner in the works, especially as several countries including Brazil and Colombia head toward elections. HIGH-YIELD AND CORPORATE BONDS High-yield and corporate bond markets could be busy in 2026, as robust dealmaking will raise demand for buyout financing and AI heavyweights will likely continue to seek capital to fund their data center investments, according to strategists. As of mid-December 2025, high-yield issuance stood at $325 billion, 17% more than 2024 and the strongest showing since the pandemic-era record of 2021, according to data from PitchBook. "We have a constructive view on high yield bonds in 2026. Over the past year, appetite for high yield bonds has been strong, comfortably absorbing what has been a relatively high supply year," portfolio managers at asset manager Janus Henderson wrote in a note. EVENT CONTRACTS "SUPERCYCLE" Event contracts, which let users wager on outcomes of real-world events across politics, sports and financial markets, are expected to become one of the fast-growing asset classes, fueled by surging retail investor demand. They became popular ahead of the U.S. presidential election in 2024, and have spurred a wave of startups into launching event contracts. "We're in the early stages of a supercycle for this burgeoning asset class," Robinhood (HOOD.O) , opens new tab CEO Vlad Tenev said at a conference. Robinhood has become one of the biggest players in this field, while Coinbase (COIN.O) , opens new tab is also attempting to gain a foothold in the industry. Analysts at brokerage Citizens Financial estimated prediction markets were currently generating nearly $2 billion in revenue, which could jump five-fold by 2030 as institutions start participating. The rapid growth, however, is drawing scrutiny from state regulators, which have accused the contracts of resembling sports betting and potentially encouraging speculative behavior. https://www.reuters.com/business/finance/investors-may-go-value-hunting-2026-ai-rally-matures-2026-01-05/

2026-01-05 11:08

LONDON, Jan 5 (Reuters) - A look at the day ahead in U.S. and global markets by Dhara Ranasinghe. The first full trading week of 2026 got off to a shocking start after the United States arrested , opens new tab Venezuelan President Nicolas Maduro over the weekend. Sign up here. Investors are taking their time to assess the fallout, however, judging by the market action today in Asia and Europe, following a week of holiday-thinned activity. To learn about the energy market implications of the Venezuela strike, check out thelatest episode of the Morning Bid podcast featuring ROI energy columnist Ron Bousso. Today's Market Minute * Venezuela's acting president Delcy Rodriguez offered on Sunday to collaborate with the United States on an agenda focused on "shared development", striking a conciliatory tone for the first time since U.S. forces captured the oil-rich nation's president, Nicolas Maduro. * The United States could raise tariffs on India if New Delhi does not meet Washington's demand to curb purchases of Russian oil, President Donald Trump said on Sunday, escalating pressure on the South Asian country as trade talks remain inconclusive. * Global stock markets, riding high on AI euphoria at the start of 2026 may be disregarding one of the biggest threats that could spoil the party: a surge in inflation driven partly by the tech investment boom. * The U.S. military’s ouster of Maduro is set to swiftly reroute Venezuela’s oil exports back toward the United States – and away from China. That will give U.S. refiners an immediate boost, but President Trump’s plans to revive production in the Latin American country may be slower to materialize, writes ROI Energy Columnist Ron Bousso. * This past year won’t soon be forgotten. In 2025, conventional thinking about economics and investor behavior was frequently challenged, as dramatic changes in technology, energy and geopolitics drove markets in often unexpected ways. The ROI team handpicked 10 charts that help explain what happened in 2025 and what it might mean for next year. Geopolitics front and center at start of a new year Maduro is due to appear in a U.S. court later on Monday after his weekend capture, with U.S. President Donald Trump leaving open the possibility of another incursion if the United States doesn't get its way with Venezuela's interim leader. Trump said on Sunday he could order another strike if Venezuela does not cooperate with U.S. efforts to open up its oil industry and stop drug trafficking. He also threatened military action in Colombia and Mexico and said Cuba's communist government "looks like it's ready to fall" on its own. On the surface, markets are taking a sort of not-much-to-see-here approach. In an era where geopolitics has become a key feature rather than a surprise, investor reaction is likely to be limited unless global supply chains are severely disrupted, some note. Oil prices drifted lower on Monday, with Brent crude last down 0.7% at around $60.04 per barrel. In a global market with plentiful oil supply, analysts said any further disruption to Venezuela's exports would have little immediate impact on prices. On Sunday, the OPEC+ group kept oil output unchanged after a quick meeting that avoided discussion of the political crises affecting several of the producer group's members. And world stocks rallied, suggesting that investors are largely brushing off weekend developments. U.S. stock futures were higher, Japan's blue-chip Nikkei soared around 3% to near record highs hit last year and in Europe, stocks touched a record high, helped by a 3% gain in defence names. Still, in a sign that heightened geopolitical uncertainty continues to be a dominant underlying theme, safe-haven gold climbed and other precious metals surged - building on a stellar 2025. Gold added over 2% to $4,429 per ounce, holding below last month's record highs. Some political analysts say markets should not underestimate the potential for regime change, highlighted by the developments in Venezuela, noting Iran - another energy-rich nation - is also worth paying attention to. At least 16 people have been killed during a week of unrest in Iran, rights groups said on Sunday, as protests over soaring inflation spread across the country, kindling violent clashes between demonstrators and security forces. Elsewhere, China's services activity expanded at its slowest pace in six months in December, as growth in new business softened and foreign demand declined, a private-sector survey showed on Monday. The focus later this week will likely turn to Friday's U.S. December jobs report. Investors also await a U.S. Supreme Court decision on Trump's tariffs, along with his choice of a new Federal Reserve chair. Chart of the day Venezuela has the world's largest estimated oil reserves, but its crude output is a fraction of its capacity due to decades of mismanagement, lack of investment and sanctions, official data shows. JPMorgan estimates that with the right conditions, production could see a 250,000 barrel-per-day uplift from its 2025 average of 950,000 bpd in the short term, and rise to 1.3-1.4 million bpd within two years. Higher output is contingent on greater investment, it adds. Today's events to watch * ISM December manufacturing PMI * U.S. Treasury Bill auction https://www.reuters.com/world/china/global-markets-view-usa-2026-01-05/