Venezuela And The Crash In Oil

I saw it coming almost 2 years ago…

I predicted that there would be “unrest and disaster”.

And finally it has come true for one of the world’s economies that I named back in 2014.

Today in this country there are mass protests, unemployment has skyrocketed and it costs $200 just to buy a cheeseburger!

Here is what I wrote in an essay in 2014:

Venezuela is going to be a key victim of this “political war on oil”.  The country is already facing a major deficit and needs oil at $150 to breakeven financially.

Unless oil prices can rally back higher…. Venezuela [is] going to be squeezed hard economically.

Did you get that?

Oil needs to be at $150 a barrel just for Venezuela to breakeven!

You see, every country that produces and exports oil in its economy, has a “breakeven” price for oil.

Take a look at this table which shows the breakeven price of some oil producing countries:

Fiscal breakeven Oil price

Oil prices began to fall significantly from July 2014 – from just over $100 per barrel down to its lows in February at $26. 

As a result, we foresaw a major financial crisis for some of the world’s countries that depend on high oil prices to breakeven financially.

Venezuela came top on our list because it has the highest “breakeven” price.

So even though the price of oil has recovered since February, Venezuela is still going to massively struggle economically.

The value of Venezuela’s currency has crashed.  A year ago, one U.S. dollar bought 200 Venezuelan bolivars. In March of this year, it bought more than 1,000.

The Venezuelan government has rationed food, water and power. The people have responded by protesting.

But things could get worse for Venezuela…

If the price of oil resumes its downward trend, then the crisis and recession in that country will deepen.

For further details on oil and where it could be heading next, join our trading service.

Alessio Rastani is a stock market trader at www.leadingtrader.com

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