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Have Oil Markets Reached A Turning Point?

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Maduro Shuffles PDVSA Management, Oil Minister

Maduro

As investors wait to see if PDVSA will default on about US$3.5 billion in debt due this fall and push oil prices up, Nicolas Maduro has for the second time this year reshuffled the company’s senior management.

Eulogio del Pino, who served as Oil Minister until this year, is now back in the government. In January, Maduro removed him from the minister’s office, replacing him with Nelson Martinez, who until that headed Citgo, the U.S. business of PDVSA. Now Martinez will take the reins at troubled PDVSA.

Del Pino has spent 30 years at the state oil company and served as chief executive between 2014 and January this year along with his ministerial responsibilities.

The move comes ahead of a meeting of heads of states including Venezuela that will seek accords on oil prices, Bloomberg quoted Maduro as saying on Venezuelan state television. As part of preparations for the meeting, the new Oil Minister will embark on a series of meetings abroad to strengthen already existing alliances.

Martinez, on the other hand, will be in charge of forging better ties with foreign companies operating in Venezuela amid a political and economic crisis that has made Venezuela a regular in daily headlines.

Related: Is OPEC Throwing In The Towel On U.S. Market Share?

The latest issue that is drawing attention to the troubled South American country is PDVSA’s possible default on debts due this October and November. RBC Capital Markets’ Helima Croft believes a default would push oil prices much higher as it would restrict Venezuela’s oil production, which is already down substantially in the last few years due to mismanagement and the oil price crash.

Also, the state oil company is the target of possible sanctions by the Trump administration. There has been a lot of talk about these sanctions and although they have not yet come to pass—mostly on concern that this would severely affect Gulf Coast refineries—they are still on the table in Washington.

By Irina Slav for Oilprice.com

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