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Oil traders and companies factor in a Chävez premium
This clown represents a clear and present danger to this country. Oil futures traders in London and New York have come up with a catchy term to describe an additional source of uncertainty when it comes to judging potential volatility in supplies: the Chävez premium. There is as yet no established formula that serves to precisely calculate how many dollars should be added to the price of a barrel of oil because of Venezuela's President Hugo Chävez, from whom the term derives. However, one thing is clear: political uncertainty stemming from Mr Chävez and his policies is becoming not only a factor in the oil markets, but it also has implications for Venezuela's sovereign bond holders and for oil multinationals.As the world's fifth largest oil exporter, for decades Venezuela had been seen as a secure source of oil, particularly to the US. Tens of billions of dollars have been invested to extract oil from the South American country. However, Mr Chävez is uncomfortable with Washington, which he sees as the centre of an imperialist "empire" bent on dominating the rest of the world, and intent on overthrowing him and his self-styled "revolution" for the poor. Posted by: TMH 2005-02-01 |
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