Commodities in Flux After US Captures Venezuela’s Maduro

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.
Karen, we begin with the latest on the situation in Venezuela,
following an extraordinary weekend of air strikes in and around
Caracas and the capture of President Nicolas Maduro. With questions
swirling about what comes next. President Trump says the US
needs total access to Venezuela.
We're going to run everything. We're going to run it,
fix it. We'll have elections at the right time. But
the main thing you have to fix it is a
broken country.
President Trump spoke aboard Air Force One on his way
back to Washington from mar A Lago, where he oversaw
the weekend strike. The President says the US will work
with acting Venezuelan President Delsea Rodriguez, though he says he
has not spoken to her. Rodriguez put out a statement
last night inviting the US to work with her on
a cooperation agenda. It's a contrast to her initial reaction
calling for Maduro's return.
As we hear from Bloomberg's Jill.
Deesis definitely a change in tone from her initial statements
which we're denouncing the actions of the US and calling
for Maduro's return. But I think the really important thing
to remember here is that, I mean, Trump seems them know,
certainly content with leaving her in charge, So you know,
it kind of points to that as being potentially a
factor there in her now talking about cooperation.
It's Bloomberg's Jill Deesis.
As for Maduro, he is due to appear in Manhattan
federal court today to face charges that could keep him
and his wife behind bars for the rest of his life.
A trial on narco terrorism charges is not expected until
next year. It's unclear if Maduro has hired a lawyer
for today's hearing well Nathan.
Secretary of State Marco Rubio is emerging as the Trump
administration's point man on Venezuela. He appeared on several of
the Sunday political shows to say, the US is running
where Venezuela goes from here.
There's a quarantine right now in which sanctioned oil shipments.
There's a boat and that boat is under US sanctions.
We go get a corridor or we will seize it
that remains in place, and that's a tremendous amount of
leverage that will continue to be in place until we
see changes not just further the national interest of the
United States, which is number one, but also that lead
to a better future for the people of Venezuela.
And that as Secretary Rubio on CBS has Faced the Nation,
Republican hawks are rallying around the administration following the weekend
of texts and Intelligence Chairman Tom Cotton was also on
Face the Nation.
This was an excellent operation only the United States military
could have pulled off, but they couldn't have pulled it
off with the support without the support of the professionals
and the intelligence.
Community Republican Senator Tom Cotton, but isolationists within the party
like Congressoman Marjorie Taylor Green are criticizing the strike.
This is the same Washington playbook that we are so
sick and tired of that doesn't serve the American people
but actually serves the big corporations, the banks, and the
oil executives.
Congressoman Marjorie Taylor Green appeared on NBA sees Meet the Press,
and you can hear Meet the Press and Face the
Nation every Sunday on Bloomberg Radio.
Well here in the US plan to revive Venezuela's oil
industry could take years and cost up to one hundred
billion dollars.
Bloomberg's John Tucker joins us at that part of the story.
John good Morning and Nathan Experts say rebuilding Venezuela's oil
infrastructure enough to lift output back to its peak levels
of the nineteen seventies would require companies that include Chevron
to invest about ten billion dollars a year over the
next decade or right now, Chevron shares up eight percent
pre market. Chris Sabatini, senior research fellow at Chatham House,
says there isn't much left of the oil infrastructure in Venezuela.
Pullm is and this was the case in I Rock too.
You're looking at, basically, in the case of Venezuela, more
than two decades on an autocratic, corrupt regime.
At Venezuela's oil parse, the equipment is in such poor
shape it takes up to five days to fully load supertankers.
Oil rigs have been abandoned, spills go unchecked, drilling pans
have been ransacked, Fires and explosions have gutted equipment. There
Venezuela does sit atop the world's largest oil reserves, but
output plummeted during the twelve year term of Nicholas Maduro.
The nation currently produces about one million barrels a day,
comparing that to nearly four billion barrels in nineteen seventy four.
And if output does increase, oil prices may decline, offering
less incentive for the oil companies to invest in New York.
On John Tucker Bloomberg.
Radio, all right, John, thank you. While the Chinese Foreign
Ministry is expressing concerns about the capture of Venezuela's Nicholas Maduro,
and here's spokesman Lyn Jan speaking through an interpreter earlier
in Beijing.
Some Tuji China express his grave concern of the US
seizing Nicholas Maduro and his wife and taking them out
of the country. The US move is in clear violation
of international law and the principles of the UN Charter.
China caused the US to enshare personal safety of President
Nicholas Maduro and his wife, released them, stopped heppling the
government of Venezuela and resolve issues through dialogue and negotiations.
Spokesman Lend Gion says China is committed to deepening cooperation
with Venezuela well.
For his part, care and President Trump is warning other
drug producing nations in the Western Hemisphere that he won't
long tolerate the flow of illegal substances into the US.
Here he is again a bord air Force one.
We have a very sick neighbor. He's not a neighbor,
but it's close to a neighbor, and that's Venezuela. It's
very sick. Colombia is very sick too, run by a
sick man who likes making cocaine and selling.
It to the United States.
And he's not going to be doing it very long.
Let me tell you.
President Trump rerefurther to Colombian President Gustavo Petro, a frequent
Trump critic, who denounced the weekend raid.
Then, the events in Venezuela have spark new questions about
America's stands toward Europe. Denmark's Prime Minister Metef Frederickson is
urging President Trump to stop threatening to annex Greenland. The
comments come after President Trump again doubled down that he
wants to take over the country right now.
Greenland is covered with Russian and Chinese ships all over
the place. We need Greenland from the standpoint of national security,
and Denmark is not going to be able to do it, I.
Can tell you.
And Greenland's elected a leader. Jens Frederick Nielsen posted on
Facebook saying there's no reason for panic as Greenland's position
is firmly anchored in international law.
No, we're seeing immediate reaction to the developments in Venezuela
across several markets. Karen spot gold has climbed above forty
four hundred dollars an ounce right now, it's at forty
four to thirty one, while silver is up nearly five percent.
Well surprising to some, Nathan, we are not seeing a
dramatic move in the oil sector in fact right now,
and Nimex crude oil is a little changed at fifty
seven dollars twenty nine cents a barrel. Steven Stepsinski leads
Bloomberg's team covering energy.
I think overall, you just look at what is being
produced out of Venezuela, and they produced some one percent
of global supply, and so where they stand in the
grand scheme of things. If you were to cut out
their supply, it can be easily replaced. But also there's
this look at, well, they have all these reserves, can
they add that supply as well? And there's expectations that
they can't really add the supply very quickly either for
a number of reasons. So the market has really shrugged
those off. There's sort of been a wait and see
situation and.
In a separate no Bloomberg Stevens step Sinski says at
a meeting yesterday, opek Plus stuck with plans to pause
supply increases in the first quarter, and.
Karen US Airlines have begun rebuilding their Caribbean operations after
the military incursion in Venezuela suggared airspace closures across the region.
American Airlines and Delta are among those that have added extra
flights and seats to accommodate displaced customers. Hundreds of flights
were canceled over the weekend after the Federal Aviation Administration
restricted parts of Caribbean airspace.
Time now for look at some of the other stories
making news in New York and around the world, and
for Never joined by Bloomberg's Michael Barr Michael, Good Morning.
Good Morning. Karen. Congress returns to Washington this week. The
Senate returns today. The House comes back Tuesday. They will
address government funding, with a January thirtieth deadline to pass
a bill or face another government shutdown. In addition, Congress
must deal with healthcare now that healthcare tax credits under
the Affordable Care Act expired last month. Millions of Americans
are unable to afford health insurance without the sub disease.
Senate Minority Leader Chuck Schumer says Democrats are willing to
work with Republicans on their plan to bring health care
costs down, hinting that refusal to do so could impact
the GOP in the midterm elections.
The Republicans have screwed this up to a fairly will.
If they can find a way out of the mess,
we want to work with anybody to lower the prices.
Senator Schumer spoke on ABC's This Week Heard Sundays on Bloomberg.
Republican Georgia Representative Marjorie Taylor Green's resignation from Congress take
effect today. There are mixed reviews about her legacy. Larry
Sabato is the director of the Center for Politics at
the University of Virginia.
I think it's always wrong to focus on the latest
event involving a person and not look at the entirety,
at least of the public career and her career. To
say it's been checkered is a compliment.
Larry Sabato is with the University of Virginia. Meanwhile, local
Republican Party chair Jackie Harling says Green was a fighter
who gave them a voice. Green's resignation will shrink the
Republican majority in the House of Representatives to six seats.
Protests continue to grow in Iran over the weekend as
concerns sparked by the Islamic Republic's ailing economy puts new
pressure on its regime to act. Since international sanctions returned
in September, Iran's currency is now in a free fall.
More than five hundred and eighty protesters have been rested.
Cruz cleared mud from key California highways. Forecasters warned that
more thunderstorms were on the way after downpours and high
tides caused flooding, prompting road closures and rescues of people
trapped in cards. Global News twenty four hours a day
and whenever you want it with Bloomberg News Now, Michael
Barr and This is Bloomberg Karen.
Well, well, thanks Michael.
Time now for our Bloomberg Sports update, and for that
we bring in John stash Hour tris staring.
The NFL regular season is over. The playoffs begin on Saturday.
There were still two spots up for grabs. Yesterday, Carolina
won the NFC South despite losing its game Saturday at
Tampa Bay. Atlanta's win over New Orleans created a three
way tie and the Panthers won the tiebreaker. The Falcons,
after winning that game, fired their coach Raheem Morris. Last
game of the season was last night in Pittsburgh, a
back and forth fourth quarter. The Steelers on an Aaron
Rodgers touchdown pass with a minute ago beat the Ravens
twenty six to twenty four won the division. That's the
Bloomberg Sports Update.
Hey with us. More from Bloomberg day Break coming up
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Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager.
After an extraordinary weekend of airstrikes and the ouster of
Nicolas Maduro. The world is watching for what comes next
in Venezuela. President Trump says, leadership in the country right
now is clear.
Don't ask me who's in judge, because I'll give you
an answer and it'll be very contro ration.
What does that mean we're in judge?
That was President Trump aboard Air Force one last night.
This morning, we're joined by Terry Haynes, the founder of
Pangaea Policy. Sharp words Terry from the President. But it
does leave a question, doesn't it, of what the US
in charge means in Venezuela. What does it mean?
Good morning, Hi, Good morning, Nathan.
Uh.
Bottom line is I wish I knew and that's no
jab at the Trump administration, I think, but I think
the policy here is a little more improvisational than a
lot of people would like, particularly in markets. Uh. They are,
I think, going to make this up as it goes
along if they can get if they can get some
sort of cooperation from the existing government, they might take that.
Uh.
I think that the existing government, from Miss Rodriguez on
down is likely to be likely to be found wanting
you know, the you know, people forget that it's not
just Maduro that's under under indictment. Uh. And and people
also forget that it's not as if this is a
some sort of conventional democratic country uh, in which you know,
the succession will work and you know somehow they'll, you know,
they'll manage to seer the ships. Slightly differently, the kind
of change that the United States now wants in Venezuela
is not to kind of change these people are poised
to deliver.
I think, well, if it is the US making it
up as it goes along, terry, what does that mean
in terms of a potential US military presence in Venezuela
and this idea of US oil companies coming in to
rebuild Venezuela's vastly decimated oil infrastructure.
Well, two things. One, I think that the I think
that it is very unlikely that there will be some
kind of major sustained boots on the ground presence in
the United States or from the United States to Venezuela.
You know, might there be some sort of small, relatively
small force that does specific things. That's entirely possible. I mean,
but we have that all over the world in a
variety of ways, in a variety of guises. So I'd
kind of look at that in the extreme. Secondly, you know,
the I think what the lookd at very broadly, the
the observations that what's going on in Venezuela, or what
had been going on in Venezuela for that matter, in
South as part of the South America policy of the
administration is about oil or resources or something else. That's
both true and too narrow a focus. You know, from
the national security perspective of the Trump administration, if you
have to look at it holistically, meaning of understanding what
the situation is. You know, pre last weekend, those competing
or opposing the United States now have control of all
those resources. So it is very important for this country.
Our government judges that we have we have access to
that as well.
Taking your point about looking at it holistically, the administration
has said it's about oil and it's about drug flows
out of Venezuela as well. And the president just last
night aboard Air Force Verse one sent a warning to
the President of Colombia, calling him a very sick man.
What could potentially come next here given those potential implications, Harry.
Well, I think the uh, yeah, I've been pointing out
since uh, since the release of the National Security strategy
in November. Uh that what was in that document was
called the Trump Corollary to the Monroe Doctrine, uh you know,
had in its sites uh you know, basically reducing Chinese
influence in South America. It needs to be understood that
China is today South America's largest trading partner and uh
and they seek to use that trade status to increase
its geopolitical influence in South America. Uh. What that means,
I think for the overall region is that uh you have,
whether it be in Cuba or Columbia or elsewhere. Uh.
You know, the administration has now uh put those folks
on notice that it is very interested in changing that
behavior or having those governments fall. Frankly, and the President
was very explicit about that in Cuba, but also thinks
that no United States action is necessary to bring that about.
I'd suggest only there that the Cubans have proved themselves
to be far more tenacious. Uh uh you know, surviving
the loss of the Soviet Union, now surviving the loss
of Venezuela. Uh and and you know, we'll see if
they can find another benefactor.
Now, well, one of the big benefactors of Venezuela has
been China, of course. I mean we've seen the Chinese
Foreign Ministry come out pretty strongly against the weekend events.
I mean, what could this bean for the US China
situation where they're trying to keep a trade truce intact.
Well, they're they're trying, well, you know, the China. The
China statement, I've had a lot of irony to it.
Nothing beats the nothing beats the Russian state. And of
course for irony, I'll let the listeners go look that up.
But you know what that means fundamentally is, you know,
the terms of the United States competition here has been
that what we're trying to do as the United States
government is you know, really try to right size and
push back against China adventurism and trying to influence gathering
in you know, many different continents. And the administration judges
that it's going to start in it's going to start
in South America. But Trump since day one has expressed
interest for to kind of clean up the United States
defense in the Atlantic and the Pacific. And this is
why Greenland is discussed. For example, it's not just because
of the resources, but also because it's got you know,
it's right on the front lines, whether you look across
to Europe up through the Arctic, which increasingly is more important.
But you know, we've been pushing back at China for
a year now, whether it be you know, kind of
pushing back against its client state Russia and Ukraine, its interests,
been pushing it around and its proxies in the Middle East,
and also helping our ally Japan and others in the
Philippines and other others in the South China Sea.
You mentioned Greenland.
Do you think there's going to be a serious move
by the US on Greenland in the short to medium term.
Now today I look at I look at this more
as a means of the takeover talk of Trump's as
pressuring Denmark to make some sort of a deal on Greenland.
It's also it also bears noting that going back a
few years, there was some interest in Greenland itself to
say oparat or created different a different political arrangement with Denmark.
I think both of those strings are being twanged rather unsubtly.
But I look at this as much the administration's view
as much more interested in making some sort of oil
minerals deal, and all the rest again, going back to China,
I think none of this consider that none of this
might have happened had not China kind of pulled the
rare earths string here, which is still unresolved and part
of the unresolved US China trade tengency.
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