"Why are oil prices down? The chief headline channel if you like for a market reaction to Venezuela is probably oil but it's only 1% of global supply, so it's not a big surprise that we have seen little to no impact, and prices are indeed lower this morning after OPEC+ agreed over the weekend to keep output steady amid a rift among members of the cartel."
"Trump promised US companies would go in and "spend billions of dollars, fix the badly broken [oil] infrastructure". I'm not sure we are about to see Chevron come in and turn Venezuela back to pumping 4m barrels a day - it will take year and require tens of billions of dollars of investment. Is there really going to be this kind of investment? How long does it take? Will the generals in charge of Venezuela really give up control?"
"Markets are never very good at pricing geopolitical risk or events. Usually, as an investor, it's best to keep calm and carry on - fundamentals win out in the end. But for now there is a considerable degree of headline risk around Venezuela that traders should be mindful of. President Trump has threatened military action against Colombia, warning it could be next if it fails to combat illicit drug trafficking. He's also warning against Mexico and Greenland."
Oil prices fell while gold and defence shares rose amid market reaction to a US raid and its fallout in Venezuela. Markets are poor at pricing geopolitical risk, creating headline risk that traders should consider. President Trump threatened possible military action against Colombia and issued warnings about Mexico and Greenland. Venezuela accounts for about 1% of current global oil supply, limiting immediate price impact, while OPEC+ kept output steady. Market attention centers on potential 2025 oversupply. Venezuela’s large proven reserves mean any substantial production restoration could further lower prices, and Chevron saw share gains on beneficiary expectations.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]