Venezuela: Venezuelan oil prices rise from January's almost-six-year low
March 16, 2015
In February, the average price of Venezuela’s mix of crude oil rose a sharp 18.5% over the previous month, reaching USD 47.8 per barrel. The reading notably contrasted the 25.4% decrease recorded in January. In January, oil prices had tumbled to an almost-six-year-low, reflecting a strong U.S. dollar, ample availability of oil in the international markets and weakening global economic growth.
According to the latest report from the Organization of Petroleum Exporting Countries (OPEC), Venezuelan oil production reached 2.34 million barrels per day (mbpd) in February, which was slightly above the 2.32 mbpd tallied in January.
The Venezuelan government relies heavily on oil revenues to balance its budget and to comply with its international obligations. Oil accounts for about 95% of Venezuela’s exports and for more than half of public sector revenues. The recent plunge in oil prices is expected to put additional pressure on the country’s battered finances. While the 2015 budget assumes an oil price of USD 60 per barrel, analysts point out that the government needs a breakeven oil price that is well above USD 100 per barrel and that the country loses USD 700 million a year for every USD 1 decline in oil prices.