NEW YORK -- Reaction in the oil market to the death of Venezuelan President Hugo Chavez was muted Tuesday, with the price of crude rising slightly in electronic trading in New York.
Chavez battled cancer for two years. In December of 2012, he underwent what officials described as a complicated six-hour, cancer-related surgery.
The full impact of his death on the oil market may not be known until Venezuela elects new leadership. In the short term, analysts expect the country's long decline in oil production to continue. Longer term, though, production could increase dramatically. Venezuela sits on the world's second-largest oil reserves, trailing only Saudi Arabia.
The price of oil rose 22 cents, to $90.98 a barrel in electronic trading in New York, in the three hours after Chavez's death was announced.
Energy historian Daniel Yergin said in an emailed statement Tuesday that it was a plunge in oil prices and the resulting discontent in Venezuela that gave Chavez the opening to win election in December 1998. Rising prices then helped him consolidate power by allowing him to fund popular programs.
"It's too soon to say what Hugo Chavez's death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible," Yergin said.
But the country's production began to decline soon after Chavez assumed power because he declined to invest in new drilling to replace depleting fields.
By 2011 the country's output had dropped 2.5 million barrels a day from 3.5 million barrels per day in 2000, according the Energy Department, and exports had fallen to 1.7 million barrels a day. Oil accounts for 95 percent of Venezuela's export earnings.
Venezuela, a member of the Organization of Petroleum Exporting Countries, increased it gross domestic product an average of 2.8 percent between 1999 and 2011, according to International Monetary Fund figures. By that measure, the country was outperformed by every other member of OPEC except Libya. Even war-torn Iraq posted higher growth.
Chavez increasingly turned against the United States, although he continued to depend on the U.S. for oil revenue. Oil shipments to the U.S. declined from 49 million barrels a month when Chavez took office, to 31.9 million barrels in February 2011. Citgo Petroleum Corp., the country's U.S.-based oil company, operates three refineries in Texas, Louisiana and Illinois, and sells fuel through thousands of gas stations. Citgo has been used by Chavez to distribute discounted heating oil to poor American families in a high-profile program aimed at criticizing Washington's approach to the needy.
Chavez invested Venezuela's oil wealth into social programs including state-run food markets, cash benefits for poor families, free health clinics and education programs. But those gains were meager compared with the spectacular construction projects that oil riches spurred in glittering Middle Eastern cities, including the world's tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi.
Earlier Tuesday, oil rose for the first time in four days during floor trading in New York, but traders questioned whether the gains were sustainable.
Benchmark oil for April delivery rose 70 cents to finish at $90.82 a barrel. Brent crude, used to price many kinds of oil imported by U.S. refineries, gained $1.52 to end at $111.61 a barrel on the ICE Futures exchange in London.
Oil rode the coattails of global stock markets. Stocks rallied as Chinese Premier Wen Jiabao confirmed the country's annual growth target of 7.5 percent and retail sales rose in Europe. A number of European indexes rose 2 percent or more. In the U.S., the Dow Jones industrial average shot to a record high.
Some traders think Tuesday's oil trading is just a pause in a downward trend.
"The ability of Brent and WTI to rebound back to above $110 and $90 suggests to us a bear market that could be in a pause for a while before resuming a decline that could carry down to about the $104 and $85 areas within the next week or two," said Jim Ritterbusch of the energy consulting group Ritterbusch and Associates.
As this week goes along, oil traders will be monitoring fresh information on U.S. supplies of crude and refined products and the latest government data on hiring.
In other energy futures trading on the Nymex:
-- Wholesale gasoline added 5 cents to finish at $3.15 a gallon.
-- Heating oil rose 5 cents to end at $2.97 a gallon.
-- Natural gas was flat at $3.53 per 1,000 cubic feet.