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Monday, 15 April, 2002, 21:00 GMT 22:00 UK
Currency plunges on Chavez return
The political turmoil in Venezuela has created havoc on the financial markets.

The South American country's president, Hugo Chavez, was ousted on Friday but reinstated on Sunday.

The uncertainty surrounding the situation has sent the currency - the bolivar - 5% lower to 860.25 to a US dollar.

The country's small stock market - the IBC - was also rattled and closed more than 8% lower.

The reappearance of Mr Chavez, however, sent oil prices sharply higher, on the belief that he will stick to the strict quotas imposed the oil producers cartel, Opec.

Rollercoaster

Oil prices have been on a rollercoaster recently, driven by international politics.

On Monday, Brent crude oil futures rose 84 cents to $24.01 a barrel during the day.

US oil markets also rose sharply as Venezuela is a particularly vital supplier to the US.

Venezuela is the world's fourth-biggest oil exporter, and relies on these exports for about half of its government's revenues.

During Mr Chavez's brief absence from the top job, there was growing concern that Venezuela would produce and sell more oil to aid its economy.

But Venezuela's energy and mines minister, Alvaro Silva, has since vowed to adhere to the oil production quotas agreed by the cartel of petroleum exporters, Opec.

Both the output and the exports of oil are set to resume as normal when oil workers and executives at Venezuela's state owned oil company PDVSA return to work on Monday.

Volatility

Crude prices bounced back from a sharp fall on Friday when six weeks of protests and three days of strikes were brought to an end by Mr Chavez's forced resignation.

Ahead of the ousting of the president, a crippling oil worker strike had pushed global crude oil prices higher due to fears that the disruption to Venezuelan supplies would be extensive.

A company statement on Friday said daily output had fallen to 1.4 million barrels a day from a norm of 2.6 million barrels.

Resignation

The last few days' bizarre events, which saw both the ousting and the return to power of Mr Chavez, are believed to have brought the clashing parties closer to each other.

On Sunday, upon his return to office, Mr Chavez said he had accepted the resignation of PDVSA's board of directors.

Venezuela's crippling oil strike had been called because of widespread disgruntlement among both executives and workers at PDVSA.

The protesters had been angered by Mr Chavez's appointment of a new board of directors for PDVSA in February.

They believed Mr Chavez's intervention threatened to destroy the important oil company and to drag down with it the Venezuelan economy.

 WATCH/LISTEN
 ON THIS STORY
Dr Leo Drollas, Centre for Global Energy Studies
"It's highly unlikely that Venezuela would suspend oil exports to the US like Iran and Iraq have threatened to."
See also:

15 Apr 02 | Americas
Chastened Chavez promises change
07 Apr 02 | Americas
Venezuela's escalating oil dispute
14 Apr 02 | Media reports
Chavez calls for national unity
14 Apr 02 | Americas
In pictures: Chavez defies opponents
12 Apr 02 | Business
Oil prices fall as Chavez quits
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