"President Donald Trump's plan to take control of Venezuela's oil industry and ask American companies to revitalize it after capturing President Nicolas Maduro in a raid isn't likely to have a significant immediate impact on oil prices. Venezuela's oil industry is in disrepair after years of neglect and international sanctions, so it could take years and major investments before production can increase dramatically."
"American oil companies will want a stable regime in the country before they are willing to invest heavily, and the political picture remained uncertain Saturday with Trump saying that the United States is in charge, while the current Venezuelan vice president argued, before Venezuela's high court ordered her to assume the role of interim president, that Maduro should be restored to power."
"But if it seems like the U.S. is successful in running the country for the next 24 hours, I would say there would be a lot of optimism that U.S. energy companies could come in and revitalize the Venezuelan oil industry fairly quickly, said Phil Flynn, a senior market analyst at the Price Futures Group. And if Venezuela can grow into an oil production powerhouse, Flynn said that could cement lower prices for the longer term and put more pressure on Russia."
President Donald Trump's plan to take control of Venezuela's oil industry and invite American companies to revitalize it after capturing President Nicolas Maduro is unlikely to have a significant immediate impact on oil prices. Venezuela's oil infrastructure has been degrading for years because of neglect and international sanctions, and rebuilding will require major investments and time. Current output is about 1.1 million barrels per day, but some analysts believe production could double or triple toward historic levels if investments and stability materialize. American companies will demand a stable regime before investing, and Venezuela's political future remains uncertain.
Read at www.eastbaytimes.com
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