The Trump administration plans to have long-term control over Venezuela's oil, aiming to keep oil prices suppressed at $50.

The Trump administration is planning a far-reaching action to dominate Venezuela's oil industry in the coming years. Trump has informed aides that he believes this move will help lower oil prices to $50 per barrel. One plan being considered includes the U.S. exerting some level of control over Venezuela's national oil company (PDVSA), acquiring and selling a majority of its oil production. When considering reserves controlled by the U.S. and companies in other countries, this could essentially put the U.S. in control of most of the oil reserves in the Western Hemisphere. Since the arrest of Venezuelan President Maduro, negotiations between the U.S. and Venezuelan government officials have focused on how the U.S. can play a leading role in increasing the country's vast oil reserves production. U.S. Energy Secretary Wright believes that the U.S. can increase Venezuelan oil production to around 1.2 million barrels per day within the next 12-18 months, but he also admits that it will take "many years" to restore production to over 3 million barrels per day, the peak production level in the past. Wright also expects Chevron Corporation (CVX.US) to rapidly increase its activities in Venezuela, while Exxon Mobil Corporation (XOM.US) and ConocoPhillips (COP.US) are also expected to play constructive roles. However, with current oil prices low, many companies see $50 per barrel as the breakeven point, below which drilling would be unprofitable. Prolonged low oil prices could devastate the U.S. shale industry. In a report, Ritterbusch and Associates point out that it may take "several years" for a large amount of Venezuelan crude oil to enter the Gulf Coast of the U.S., especially if American companies other than Chevron Corporation are hesitant to make large-scale investments due to lack of security and financial guarantees, as well as sufficiently high oil prices to support investments. Analyst Ritterbusch wrote that American intervention in Venezuela would be more reasonable "in a tight global oil market, rather than the current environment of oversupply." Crude oil futures rebounded over 3% on Thursday, with buying interest rekindled after a larger-than-expected drawdown in U.S. crude inventories. Earlier in the week, news of potential increases in Venezuelan oil supply had put pressure on prices. The February contract for near-month WTI crude on the New York Mercantile Exchange closed up 3.1% at $57.76 per barrel, while the near-month March contract for Brent crude rose 3.4% to $61.99 per barrel. This marks the largest single-day gain for these two benchmark crude oils since October 23 of last year. U.S. natural gas futures fell for the sixth time in seven trading days, as the 119 billion cubic foot reduction in inventories reported last week met expectations but failed to provide effective support. The February near-month contract on the NYMEX fell 3.3% to $3.407 per million British thermal units.