STI rises 0.5% despite turmoil in Venezuela over the weekend
US President Donald Trump said the US would take control of the oil-producing South American nation following the capture of it president Nicolas Maduro
[SINGAPORE] The Straits Times Index (STI) rose on Monday (Jan 5) morning as Asia resumed trading after the weekend’s political upheaval in Venezuela.
This followed a fall in oil prices in early minutes of the Asian trading day, down to ample supply, despite concerns about the situation in Opec member Venezuela.
In Singapore, the benchmark STI rose 0.5 per cent shortly after trading began, while shares of Singapore-listed energy players also climbed.
As at 9.10 am, Sembcorp Industries shares rose 0.5 per cent, while Rex International was up 1.4 per cent. China Aviation Oil, owned by China National Aviation Fuel Group, was also up 0.6 per cent.
Meanwhile, South Korea’s Kospi climbed as much as 2.6 per cent minutes after market open and Malaysia’s Kuala Lumpur Composite Index was up almost 0.4 per cent.
The US on Saturday executed a swift operation to capture and extract Venezuelan president Nicolas Maduro amid questions over the legality of its actions. US President Donald Trump later said his country would take control of the oil-producing South American nation.
Venezuela supplies about 0.8 per cent of the world’s oil at about 1 million barrels of oil per day. That is less than half of what it produced before Maduro came to power in 2013 and is dwarfed by the 20 million produced by the US, the world’s largest producer.
“Global supply remains ample, Venezuelan production represents a small share of worldwide output and there’s no clear evidence yet of sustained disruption to physical flows,” said Nigel Green, chief executive officer of financial consultancy deVere.
The wider Opec+ agreed to keep oil supply steady at its meeting on Sunday, despite the situation in Venezuela and tensions between key members Saudi Arabia and United Arab Emirates.
However, Green noted that China may still feel the effects of any disruptions in oil supply from Venezuela.
The majority of Venezuelan crude exports flow to China, with limited exposure to US or European refiners, which he said reduces the immediate sensitivity of Western benchmarks like Brent and WTI.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
