New reports Friday suggest that Venezuelan President Hugo Chavez is fighting for his life, but for now, at least, the oil market hasn’t shown any reaction.
Crude-oil prices have finished little changed over the past two trading sessions, with the U.S.
Since Chavez took office in 1999, Venezuela’s oil production has dropped and its oil infrastructure has deteriorated, analysts say.
If Chavez were to pass away that would “unlikely to have too much of a bullish impact on prices over the longer haul because Venezuela’s domestic oil industry has deteriorated so much under his control due to nationalization of it and a lack of investment,” said Matt Smith, a commodity analyst at Schneider Electric, a Louisville, Ky.-based global specialist in energy management.
There could be a rally in the near term if he didn’t survive, “given the instability it would cause, especially as Venezuela is a key oil exporter,” he said, and there could be a bearish impact over the long term if investment was increased by Chavez’s successor.
Marketwatch
