Oil prices rise in Asia on uncertainty after Chavez death

  • Business
  • Wednesday, 06 Mar 2013

SINGAPORE: 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 32 cents to $111.93 in mid-afternoon trade.

"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.

"There is a potential for instability in the country," Hughes told AFP.

Venezuela has the world's largest proven oil reserves, according to the Organization of the Petroleum Exporting Countries (OPEC).

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 percent of the country's hard-currency revenue.

Chavez, 58, lost his battle with cancer on Tuesday, plunging the nation into an uncertain future.

The foreign minister has said an election will be held within 30 days and that Venezuelan Vice President Nicolas Maduro will take over as interim president from Chavez, who had been in power since 1998.

However, that decision appears to contradict the constitution, which says the National Assembly president should take over the presidency in the event of the president's death. - AFP

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