Yesterday Monday, April 20, 2020 was a bad day for the global oil market. Venezuela is the most important country in the world in terms of energy reserves and does not escape the consequences.
In this context DailyBitcoin checks what is currently happening to oil, and How does this situation affect the value of? Petro and its dynamics.
What is happening in the oil markets?
As reported DailyBitcoin previously the price of a barrel of oil caught the world’s attention. The reason? The future of West Texas Intermediate (WTIUS deliveries in May closed at -USD 37.63 (down 305.97% in just 24 hours), an unprecedented price in market history. Futures WTI June results are still trading above $ 20 a barrel.
The oil price in turn Brent, a reference for Europe and other countries in the world, but mostly for Venezuela, closed at $ 25.5 for a less dramatic and less pronounced 8.9% decline.
Today, April 21, Brent It fell 21.7% on the London futures market, which was also badly affected by the fall in demand.
On twitter @petrodivisa He stated that the drop was already 24% at 9:00 a.m .:
oil #Brent It touched the $ 18 drop 24% when it was dramatic for gringo oil yesterday. I don’t think it looks any different for Brent. The graphic is eloquent and indicates that a large decline is imminent. At this moment Venezuela would have to sell its crude oil between the US $ 5 to $ 7. pic.twitter.com/yyTDJtF3e8
– Petro Divisa❁ (@PetroDivisa) April 21, 2020
According to the press, the causes of the decline include the decline in demand for the product, which in turn was caused by global quarantine measures to curb the COVID-19 pandemic. As a result, the situation worsened due to difficulties in storing the excess, which led to the saturation of the deposits. At this point, as you quoted DailyBitcoin in the morning note: “The world has more oil than it can store (and use). “.
What does the white paper say? Petro?
The oil crash that was already going on after the coronavirus pandemic is likely to have a negative impact on the fragile Latin American and Venezuelan economies. In this country Tax revenues depend to a large extent and directly on crude oil exports. For the medium avant-gardethe oil crash is a phenomenon that only extends the shadow of a possible one “”default“Venezuelans, the feared default.
In this context, the state cryptocurrency Petro – created by the Venezuelan government in December 2017- is anchored in the value of crude oil Brent, the same that fell 8.9% in the markets yesterday.
To White paper of the Petrothe cryptoactivity along with other Venezuelan minerals and deposits from a 50% of Venezuelan oil on the markets Brent. Even an exchange approved by the Venezuelan government, Cryptolago, says in the description of the Petro on your website:
Its price relates to the sales value of the goods in international markets: Fifty percent oil (50%), gold twenty percent (20%), iron twenty percent (20%), and diamond ten percent (10%)
To be like this and see the case BrentYou could say that at least half of the Petro As an asset, it is currently in sharp decline.
What happens to the value of the petro after the oil debacle?
According to the official website of the Petro for today April 21, 2020, The government’s crypto asset is still trading at $ 59A valuation that has not changed over time (its initial valuation was $ 60) and is far from being equated with a process of real supply and actual demand for the asset. In addition, on the platform homeland It is quoted at USD $ 50.1.
Actually the price is from Petro There had never been any significant fluctuations or fluctuations due to the secondary market on either website, which determined the dynamics of supply and demand in Venezuela. For this reason Many think that there is no point in setting the value of Petro depending on the price on their website or homeland.
It should be noted that the Venezuelan government decided in December 2019 that the National superintendance of cryptocurrencies (SUNACRIP) will regulate the exchange of crypto assets in Venezuela via the platform homeland.
At this point, a kind of internal exchange was created (Home exchange) and it was announced that all operations related Petro They would run on the secondary markets based on the price of the asset. Until now homeland Exchange does not start and there is no news about it.
value of Petro for authorized exchanges
In Venezuela, the aforementioned secondary market is itself represented by a certain number of companies or companies that operate as exchanges authorized by them SUNACRIP.
Be so, DailyBitcoin revised the price of Petro encounter in some of them a reality that comes closer to that in international markets::
Although it was not possible to access both websites today because both websites were unavailable, yesterday we had an average price at close of business Petro, after the official change after Central Bank of Venezuela (BCV)of USD $ 10.7 for each unit of Petro in Antwerp coin and from USD $ 10.3 per unit in Cryptolago. DailyBitcoin tried to access the operator Cryptia, but it still depends today.
As you can see, They are much lower prices than that on the official website of the Petro (USD $ 59) and closer to the value of the oil drum.
And what does the crypto community think?
With the decline in oil prices WTI y BrentMany in the crypto community and generally across the social network Twitter, had concerns about the transfer Petro-oil, since the cost of government proceedings is anchored in value Petro on your website.
In this sense, the question that has arisen in networks is the following: Will the process prices and salary change?
The journalist Gabriel Bastidas asked in yesterday Twitter about what will happen to all the paperwork values that are in the Petro.
Wages, prices for goods and services, passport procedures, the control unit …
What happens to everything that is anchored in the petro, which in turn is anchored at the price of a barrel of oil? # 20Apr pic.twitter.com/mzWaFxdQdw
– Gabriel Bastidas (@Gbastidas) April 20, 2020
Another journalist, @melaniobar, said an hour later in a more sarcastic tone:
Since the price of the procedures relates to the value of the petro, which in turn is anchored in the oil, this means that if you process the passport in the Saime, you not only owe the document but you really owe it.
– Melanio Escobar (@MelanioBar) April 20, 2020
For the medium Report 21Nothing will likely change in terms of procedures and that there is a silence from the government on the subjectHowever, the reality is that public finances and the state of the national bureaucratic situation are in a serious crisis.
Petro: “An Arbitrary Invention”
The economist Adrúbal Oliveros, founder of the company Eco-analyticalhe explained to the media avant-garde the “(petro) is a fairly arbitrary government invention“Since his “They set values according to government needs, not market conditions”.
In this way it becomes “an arbitrary government creation that is very dependent on it”From what the executive is considering.
If you are asking about the logic of the market or what is crypto activity, there should actually be a complete change as it is tied to the behavior of the oil barrel. In this case, this did not happen and has consolidated its status as a “unit of account”. .
DailyBitcoin He asked a government official for explanations on the subject, but there was no response at this time.
Bitcoin price and major cryptocurrencies fall on April 21 due to the historic drop in oil
Venezuela: Asonacrip suggests that the Petro economic crisis caused by Covid-19 be overcome
Venezuela: Bonus from a Petro Doctors only have enough for a pair of shoes and maybe a medical gown
The NY Times interviewed the creator of the Petro: “They took control of the project and made it a kind of oil peg.”
Sources: archive DailyBitcoin, Petro, The National, Cryptolago, Report 21, Vanguard, WTC Radio.
Report by Arnaldo Ochoa / DailyBitcoin.
Image created with Canva