Venezuela: Venezuelan oil prices tumble to almost-six-year low in January
February 10, 2015
In January, the average price of Venezuela’s mix of crude oil fell a sharp 25.4% over the previous month, reaching USD 40.3 per barrel, which was the lowest price that had been recorded since February 2009. The reading followed the 23.0% decrease recorded in December and mainly 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 2.32 million barrels per day (mbpd) in January, which was unchanged from the 2.32 mbpd tallied in December.
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.