Venezuela is "Toast'

[dan_s]

Comments below are from RBC Capital Markets Michael Tran on April 27th. Oil traders seem to be missing the impact that this may have on the global oil market.

Venezuela – Long Way Down: Venezuela’s descent into chaos
continues to quicken with the country pulling out of the
Organization of American States (OAS) this week citing alleged
interference in its internal affairs. The move comes against a
backdrop of proliferating anti-government protests, with at
least 28 people killed since the beginning of the month. Street
violence looks set to escalate with regime supporters vowing
to commence pro-government demonstrations on May 1.
Meanwhile, all economic indicators continue to point
decidedly in one direction – down. The Venezuelan economy
shrank by 19% and inflation approached 700% in 2016. Food
shortages have become so pronounced that the average adult
in Venezuela lost 19 pounds last year. Oil production
continues its downward drift due to service provider cuts,
power shortages, inability to obtain imports and irregular
salary payments. The big question is whether current
conditions could set the stage for the type of industrial action
that cut exports by nearly 80% in the early 2000s.