Venezuela: Oil prices fall in February
The average price of Venezuela’s mix of crude oil fell in February to USD 58.0 per barrel (pb), down from the prior month’s multi-year high of USD 61.4 pb. This represented a 5.5% month-on-month drop in oil prices. The decline in oil prices in February mostly reflected heightened volatility in U.S. stock markets, which negatively reverberated through global oil markets, and soaring output by U.S. shale oil producers.
Nevertheless, renewed demand and production cuts by key producers have helped oil prices recover strongly since June 2017, and February’s price was still up 25.2% in annual terms. OPEC members have on the whole complied with production curbs, which has in part been due to lower production in Venezuela. The production curbs have led to higher oil prices, but that has not been able to stop Venezuela from sliding into further economic chaos. Oil exports make up the vast majority of Venezuela’s exports.
Last year, oil production nosedived because of insufficient investment, mismanagement of oil fields and the rationing of electricity. Recently released data from the Organization of the Petroleum Exporting Countries (OPEC) showed that output in Venezuela fell to 1.60 million barrels per day (mbpd) in January, down from December’s revised 1.65 mbpd (previously reported: 1.75 mbpd).