Oil prices rise on uncertainty after Chavez death
SINGAPORE (AFP) – Oil prices climbed in Asian trade Wednesday on uncertainty following the death of Hugo Chavez, the president of major Latin American crude producer Venezuela, analysts said.
New York’s main contract, light sweet crude for delivery in April, added 26 cents to $91.08 a barrel and Brent North Sea crude for April delivery rose 43 cents to $112.04 in mid-morning trade in Asia.
“The impact of the news seems to be minimal at this point in time, but some speculation and risk has been priced into oil futures,” Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore, told AFP.
“Chavez has been in this position for so long, so there is a risk embedded in the political transition that could result in a disruption of oil supply.”
Jason Hughes, head of premium client management at IG Markets Singapore, said the full impact of the left-wing leader’s death has yet to be felt but traders are watching for signs of instability within OPEC member Venezuela.
Venezuela has the world’s largest proven oil reserves, according to the Organisation of the Petroleum Exporting Countries (OPEC).
“There is a potential for instability in the country,” Hughes told AFP.
Chavez, 58, lost his battle with cancer on Tuesday, plunging the nation into an uncertain future, but there has been no violence so far and the foreign minister said an election will be held within 30 days.
The government says Venezuela produces three million barrels of oil per day, although OPEC says the figure is 2.3 million. Oil production accounts for 90 per cent of the country’s hard-currency revenue.