© Reuters. FILE PHOTO: A state oil company PDVSA’s logo is seen at a gas station in Caracas, Venezuela May 17, 2019. REUTERS/Ivan Alvarado/File Photo

By Rodrigo Campos and Mayela Armas

NEW YORK/CARACAS (Reuters) -Venezuela’s sovereign bonds rallied on Thursday, a day after the United States lifted its ban on secondary market trading of some of the country’s eurobonds, with investors eyeing a debt restructuring on some $60 billion of defaulted debt.

Quotes for the South American nation’s sovereign debt rose to as much as 20 cents on the dollar while a 2020 note of state oil company PDVSA was up 13 cents at 66.5.

“Prices have almost doubled in the past 24 hours but are still well below the pre-sanctioned levels,” said Edward Cowen, CEO of Winterbrook Capital, who has co-invested in a fund to buy Venezuelan debt.

Cowen added that a return to Venezuela’s regular weighting on global indexes like JPMorgan’s would give the prices further support.

On Wednesday, the U.S. Treasury Department said it had amended two licenses to remove its long-held secondary market trading ban on certain Venezuelan sovereign bonds and on the debt and equity of state-run oil company PDVSA, in response to a deal reached between the government and opposition parties for the 2024 election.

Investor interest had increased after the U.S. decision not to block the potential seizure by creditors of shares in Venezuela’s most important offshore asset, oil refiner Citgo Petroleum.

Yet Wednesday’s U.S. decision caught bond investors off guard as negotiations between the Venezuelan government and the opposition are just restarting.

“I think the market was caught by surprise as the ban on secondary trading of bonds was not expected to be removed this early in the negotiation,” said Armando Armenta, senior economist for global economic research at AllianceBernstein (NYSE:). “We are sure the U.S. State Department is fully aware of the hurdles ahead and will be ready to act if the Venezuelan government does not comply with their end of the agreement.”

Armenta added that a key development would be whether the government’s ban on the candidacy of Maria Corina Machado, the favorite in the opposition primary ahead of the presidential election, is removed.

The U.S. government has conveyed to Maduro that bans must be lifted for all opposition presidential candidates by the end of November in exchange for sanctions relief.

Venezuela and PDVSA, which have more than $60 billion in debt, stopped paying bondholders at the end of 2017 and several creditors filed lawsuits in court.

Small funds and investors outside the United States had looked to increase their exposure to Venezuelan bonds on the expectation of debt renegotiations.