Venezuela: Stabilising Middle East and rising concerns on Europe push oil prices down
July 10, 2011
In May, the average price of the Venezuelan mix of crude oils slipped 5.2% over the previous month to reach USD 102.00 per barrel (April: USD 107.54 per barrel). The price was dragged by an improvement in the Middle East situation, as some of the conflicts in the region are apparently easing. Moreover, revived concerns regarding Europe's debt crisis and weak macroeconomic indicators in the United States have also generated negative expectations in the market. According to the latest report from the Organization of the Petroleum Exporting Countries (OPEC), in April oil production in Venezuela virtually matched the previous month's output of 2.31 million barrels per day (mbpd). In addition, OPEC is in negotiation to increase crude output quotas in order to tame rising oil prices. Meanwhile, the U.S. government sanctioned the national state-owned oil company PDVSA (Petroleos de Venezuela) for delivering at least two cargoes to Iran. The sanctions will prohibit PDVSA from competing for U.S. government contracts, from securing financing from the Export-Import Bank of the United States, and from obtaining U.S. export licenses. However, the sanctions do not prohibit the export of crude oil to the United States.