Market Flash on U.S. Oil and Gas Drilling

EquiLend data reveals sharp unwind in oil & gas shorts preceding a rally in the sector during the leadup to Maduro’s capture.

In the lead-up to the capture of Venezuelan President Nicolás Maduro, there was a sharp unwinding of short positions in the U.S. Oil and Gas Drilling sector, as evidenced by EquiLend’s premier Data & Analytics platform. From September 1, 2025, to January 5, 2026, EquiLend Borrow Quantity fell from 194m shares to 149m shares (-30%) across the sector, signalling a retreat by bearish investors. Concurrently, EquiLend Borrow Demand decreased from 24.1% to 19.4%, reflecting easing demand for borrow supply as equity valuations rallied.

This contraction in short interest started in early September, shortly after the first Venezuelan boats were intercepted by the U.S. military. This preceded a surge in bullish sentiment in Q4, leading up to the capture of Venezuelan President Maduro and subsequent reconstruction prospects. On January 5, 2026, news broke regarding the potential involvement of U.S. oil companies in the region’s transition, which furthered a rally in related stocks. The prospect of reopening Venezuelan markets has fundamentally altered the risk profile for the sector, prompting the data shifts observed above.

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