Venezuela: Venezuelan oil prices plunge to a new all-time low in January
February 11, 2016
In January, the average price of Venezuela’s mix of crude oil dropped 19.8% over the previous month, falling from USD 30.3 per barrel in December to USD 24.3 per barrel in January and thus breaking the record low that was recorded in December.
According to the latest report from the Organization of Petroleum Exporting Countries (OPEC) that was released on 10 February, Venezuelan oil production decreased from 2.36 million barrels per day (mbpd) in December to 2.32 mbpd in January.
The Venezuelan government relies heavily on oil revenues to balance its budget and to meet its international obligations. Oil accounts for about 95% of Venezuela’s exports and more than half of public sector revenues. The recent plunge in oil prices is putting additional pressure on the country’s finances as USD 9.5 billion in foreign debt payments are due this year alone. While the 2016 budget assumes an oil price of USD 40 per barrel, analysts have pointed out that the government needs a breakeven oil price that is well above USD 100 per barrel and the latest analysis indicates that oil prices won’t recover at least until the second half of this year.