North American oil prices saw a more than one percent increase on Monday due to recent unrest in Venezuela, while shares of some leading Canadian oil and gas companies experienced declines in early trading. West Texas Intermediate, the North American benchmark, closed the day trading 1.7 percent higher at just over $58 US per barrel. Despite the rise, prices remain relatively low, standing about $15 lower compared to a year ago.
Several Canadian energy companies witnessed a drop in their stock prices, with the Toronto Stock Exchange’s energy index declining by approximately 4.5 percent midday Monday before recovering slightly to end the day down about 3.5 percent. Notable declines were observed in the shares of major oil and gas firms in Canada, including Suncor Energy down around four percent, Cenovus Energy and Canadian Natural Resources Ltd. each dropping about seven percent before some recovery later in the day.
Venezuela’s heavy crude production, similar to Western Canada’s oil, has raised concerns about the country’s ability to boost its oil and natural gas output. Barry Schwartz, chief investment officer at Baskin Wealth Management, emphasized the significance of Venezuela’s oil reserves comparable to Canada’s. Despite the stock declines in Canadian energy companies, Schwartz suggested that the reaction might be exaggerated, pointing out the extensive time needed to reconstruct Venezuela’s energy sector infrastructure for a significant production increase.
The recent removal of Venezuelan President Nicolás Maduro has led to impacts on oil markets due to Venezuela holding some of the world’s largest oil reserves. Venezuela’s oil production has dwindled, with only 900,000 barrels per day extracted last year, a stark contrast to the peak of 3.7 million barrels per day in 1970. Although Canadian and North American markets saw overall increases in value on Monday, the future trajectory of Venezuela’s oil and gas sector remains uncertain.