As Energy Markets React to Venezuela, One Stock Emerges as Technical Standout

Given the dramatic events in Venezuela over the weekend of January 3, 2026, the U.S.-led capture of Nicolás Maduro, has injected fresh uncertainty into the energy sector.

Major Wall Street firms highlight the geopolitical fog, but in this article, I've combined a technical lens to see if the "tea leaves" in the charts reveal where the market is headed.

Energy Stocks Reacted Swiftly — And Selectively

Energy stocks surged across the board on Monday, January 5, as markets opened following the early-morning raid in Caracas (around 2:00 a.m. local time, or 1:00 a.m. ET). Many names with known Venezuela exposure had already started climbing on January 2, anticipating developments. The initial pop was strong — SLB (SLB) led the pack — but some have pulled back modestly since.

Key energy stocks started rising ahead of the capture of Maduro, some stocks waning.

Zooming out:

• Over the past 12 months, this Venezuela-sensitive group bottomed in April 2025 and has trended higher. Standout performer: Valero Energy (VLO) , up over 50% in that period, far outpacing the S&P 500's 16% gain.

*Valero leading the pack over the last year.*

• Longer-term (three years), the group has lagged the broader market, with many still below prior highs. Refiners such as VLO and Marathon Petroleum (MPC) show the most promising recovery patterns — classic long-term declines followed by rebounds.

Energy stocks have been underperforming the S&P 500 but opportunities could be in VLO

Broader Context: U.S. Oil Production and Intermarket Signals

U.S. crude production has roared back since the late 2000s, now hitting new highs alongside global output post-COVID. This supply growth remains a key long-term headwind for oil prices.

*World oil production is at highs and U.S. acceleration since 2010 has been dramatic. Higher oil supply not over?*

Intermarket view: The inverse relationship between the U.S. Dollar Index (DXY) and WTI crude remains intact over the past decade. Both have recently broken lower — DXY below prior range support (now around 98-99) and oil testing lows near $57-58 per barrel as of January 7. This non-confirmation suggests caution, with overhead supply capping big upside for now.

US Dollar and WTI Crude Oil are both below support in a non confirmation pattern.

Screening for Technical Strength

Using a proprietary quantitative screen on GICS-classified energy stocks in the Russell 3000 (factoring relative strength, position in range, and volatility), mid-cap refiners and equipment names dominate the top ranks. Among large-cap institutional-quality plays, Valero (VLO) scores highest — consistently elite across frameworks.

VLO's chart stands out: A 2024 high near $174, drop to ~$97 in April 2025, then a steady climb to new highs. As of January 7, the shares traded as high as $191 before closing around $187 — pushing toward multi-year breakout territory.

A Classic Measured Move in VLO Implies a Target of $258

Applying standard classical technical analysis:

• The long-term base range is about $78 (high $174 in April 2024 to low of $97 in April 2025).

• The average pivot high based on the recent December 2025 peak and prior peach at the beginning of the base is $180.

• Measured upside target is about $258 (adding the base to the pivot).

Given the current price, this implies a meaningful upside potential. From a risk management perspective a logical downside risk is below $159 which is about 14-15% downside risk from here — solid reward/risk for a tactical trade.

Wall Street agrees on the upside. According to TipRanks, the Consensus average is a "Buy" rating with average price target of $186 (some as high as $223 from Piper Sandler).

Fundamentals support this — VLO's refineries are optimized for heavy sour crude like Venezuela's, and discounted barrels could boost margins if supply flows increase. Phillips 66 (PSX) offers a similar fundamental setup.

Bigger Picture: Limited Near-Term Impact, But Refiners Win

News flow confirms Venezuelan oil's return will have muted direct impact on majors like Chevron (CVX) or Exxon Mobil (XOM) (focused on upstream). Refiners like Valero and Phillips 66 are better positioned for cheaper heavy crude feedstock.

Global supply is already ample, with U.S. production at records — pointing to potential oversupply pressure in 2026. Still, the technicals scream relative strength in select names.

This isn't a forever hold in my core strategy (cyclical business, quality considerations), but it's a compelling tactical trade. Pullbacks offer entry — watch volume for confirmation.

Happy trading. Questions or thoughts? Drop them below.

At the time of publication, Llanes had positions in VLO and EQT.