What happened

Preferred shares of Brazilian oil giant

Petroleo Brasileiro

(NYSE: PBR-A)

,aero precision r one handguard popularly known as Petrobras, closed 9.7% higher on Wednesday, while

Petrobras

(NYSE: PBR)

common stock, which carries with it voting rights and therefore costs a bit more, rose 7.7%.

There are at least two reasons this happened.

For one thing, oil prices climbed in Wednesday trading -- obviously a plus for an oil stock like Petrobras. U.S. benchmark WTI crude oil closed up 2.5% at $46.54 per barrel, while the internationally preferred Brent crude price climbed 2.1% to close at $54.91.

Ocean oil drilling platform

Wednesday was a good day for oil stocks -- and a

very

good day for Brazilian oil stocks. Image source: Getty Images.

So what

But also -- and perhaps more important for an oil stock like Petrobras

that is based in Brazil

-- new

Brazilian President Jair Bolsonaro

made an inauguration speech after getting sworn in yesterday.

In that speech, Bolsonaro promised to "rescue Brazil from corruption" and "free Brazil" from socialism. Bolsonaro has also previously promised to enact market-friendly reforms in Brazil, overhaul the country's pension system, and privatize state-owned companies to better align their interest with shareholders.

This last point could be especially important to investors in Petrobras, given that, according to data from

S&P Global Market Intelligence

, nearly 45% of Petrobras' voting shares are controlled by either Brazil itself, or by a subsidiary of the Brazilian federal public company National Bank for Economic and Social Development.

Now what

What might further privatization mean for Petrobras shareholders? Loosening the company's ties to the Brazilian government, Petrobras would presumably become more motivated to seek profit for its shareholders, rather than -- for example -- seeking to maintain jobs for Brazilian voters. Cutting ties to government might also help tamp down the temptation for Petrobras to involve itself in high-profile and

shareholder-damaging bribery scandals

, both of which can be expected to boost returns for shareholders.

That Bolsonaro has made the elimination of corporate and government corruption a cornerstone of his platform also tends to support the hope that Petrobras will feature prominently in future privatization efforts. At least that seems to be what Petrobras investors are betting on today.

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Rich Smith

has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a

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