Yesterday in Caracas, after a rally of thousands of people, the current president Nicolas Maduro was removed from power. He had tried to build a “socialist paradise” in Venezuela, the main achievement of which was last year’s inflation of the national currency, which exceeded 80,000 percent.
After the fall in oil product prices in 2014, the government had nothing to cover the budget and a printing press was launched. The country did not have large cash reserves for the long-term support of current government policies.
During the rally opposition leader Juan Guaido declared himself the acting president of Venezuela. He promised to form an interim government and hold fair elections in the country. He was first recognized as Acting President by Donald Trump, and afterwards he was supported by a number of countries in South America and Canada.
Stock prices of oil companies that have their shares in the oil industry in Venezuela fell significantly yesterday.
Nicolas Maduro refused to admit defeat and said that this was a provocation by the United States and decided to break off diplomatic relations between the countries, recalling ambassadors and giving American diplomats 72 hours to leave the country.
If the situation in the country is resolved peacefully, then Venezuela will soon be able to resume normal oil production and return to the market, spurring oil quotes to a decline.
We also expect the release of data on crude oil reserves in the United States today, and we believe that the growth of this indicator will be able to return the price of Brent crude below $60 per barrel.
