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Thursday, April 27, 2017

Venezuela’s Complicated Crisis For Oil

The cold logic of the oil market dictates that crisis usually equals profit. That’s because a crisis in oil usually means a supply crisis, as some large producing country becomes embroiled in war or civil unrest or sanctions or some other geopolitical mess.The country currently occupying the unenviable position of being the likeliest source of a supply shock is Venezuela. The collapse in oil prices has savaged the country’s economy and brought political tensions to a head in the form of a constitutional crisis, mass protests and, particularly over the past week or so, looting and fatalities.From the oil market’s perspective, the question is whether Venezuela’s intensifying problems will cause an outright collapse in its production, currently running at about 2 million barrels a day. It’s a bit more complicated than that, though.Venezuela’s supply has slumped already: More…




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