09/26 Closing prices / revised 09/27/2023 09:32 GMT  |    09/25    OPEC Basket    95.31        –0.42    |    09/26   Mexico Basket (MME)   $86.70 +0.19 06/23  Venezuela Basket (Merey) $57.37  + 1.15 ( from previous month)  (Est. OPEC)  | 09/26    NYMEX WTI Texas Intermediate November  CLV23  $90.39     +0.71  | 09/25    ICE Brent November  BRNX23   $93.96     +0.67   | 09/26    NYMEX Gasoline October  RBV23    $2.5622    +0 01   09/26    NYMEX  Heating Oil  October HOV23   $3.2238     -0.03    |  09/26    Natural Gas November NGX23    $2.6560      +0.01  09/22    Active U.S. Rig Count (Oil & Gas)    630      -11 | 09/27    USD/MXN Mexican Peso   17.5169   Live data  | 09/27      EUR/USD  1.0556  Live data  | 09/27   US/Bs. (Bolivar)      $34.0933000  ( data BCV)    |

Venezuela Breakthrough Gives Defaulted Bonds a Rare Bounce – Bloomberg

  • Prices of defaulted sovereign and oil notes rise Monday
  • Chevron license improves outlook, but traders remain cautious
Nicolas Maduro (Manaure Quintero/Bloomberg)

Nicolle Yapur and Maria Elena Vizcaino, Bloomberg News

EnergiesNet.com 11 29 2022

Defaulted Venezuelan bonds gained Monday following a breakthrough on political negotiations and a license from the US allowing Chevron Corp. to resume oil production in the sanctioned country.

Sovereign and state oil company notes rose as investors wager the Biden administration will be more willing to ease restrictions, including a potential lifting of sanctions that prohibit US investors from buying the country’s debt. President Nicolas Maduro and the opposition ended a yearlong standoff over the weekend and resumed negotiations, prompting Washington to grant Chevron’s license. 

Although they are still deeply distressed, the nation’s dollar notes rose to 9 cents on the dollar, about one cent higher than last week. Bonds maturing in 2021 sold by Petroleos de Venezuela SA jumped to 6 cents from around 4 cents last week, according to data compiled by Bloomberg. 

While the gains reflect a rare glint of optimism in a normally dead market, traders dismiss the notion that a long-term rally is underway. 

“It’s difficult for the bonds to gain more going into year end,” said Ramiro Blazquez, head of research and strategy at BancTrust. “I’d say we need more evidence of bigger steps when it comes to negotiations and political concessions from Maduro’s side.”

Delegations representing Maduro and the opposition on Saturday signed a deal to use about $2.7 billion in frozen funds to finance a humanitarian plan that includes repairs to the country’s failing electricity grid. Hours later, the Biden administration published new rules allowing Chevron to expand operations in Venezuela and resume crude exports to the US.

The move is unlikely to result in a significant spike of oil production, but it signals to investors that the trading ban imposed by US sanctions on Venezuelan debt could be modified in the future. 

It also sets the stage for marginal bondholders to consider alternative investment plans, such as as debt-for-equity deals, said Francesco Marani, head of trading at Madrid-based Auriga Global Investors. He says prices of sovereign and PDVSA bonds could surpass 10 and 7 cents respectively by the end of the year.

Traders are now looking at whether the two sides can continue to make progress, including setting conditions for the 2024 presidential election. Several previous rounds of talks have collapsed after they reached only minor agreements. 

“Any further progress is likely to be slow, based on previous rounds of diplomacy, and could stall or even reverse if Maduro does not appear committed to the process,” London-based Medley Advisors’ analysts Richard Bronze and Pilar Navarro wrote in a note to clients.

bloomberg.com 11 28 2022

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top