Venezuela: Venezuelan oil prices plunge to an all-time low in December

In December, the average price of Venezuela’s mix of crude oil dropped 17.0% over the previous month, falling from USD 36.5 per barrel in November to USD 30.3 per barrel in December, the lowest price on record.



According to the latest report from the Organization of Petroleum Exporting Countries (OPEC) that was released on 18 January, Venezuelan oil production decreased from 2.37 million barrels per day (mbpd) in November to 2.35 mbpd in December.



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 expected to put additional pressure on the country’s finances. 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.

Panelists participating in this month’s LatinFocus Consensus Forecast expect oil prices to average USD 41.4 per barrel this year, which is down USD 9.6 per barrel over last month’s projection. In 2017, the panel sees oil prices rising to USD 55.6 per barrel.