Venezuelas crumbling oil infrastructure aids other OPEC nations: Bloomberg
Venezuela Has Some Bad News and Some Really Bad News
The country's oil production has collapsed; the only question is just how badly.
By Liam Denning
January 18, 2018, 11:01 AM CST
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Equally, though, new leaders inheriting bad situations have an incentive to kitchen-sink the figures in the hopes of gaining credit for subsequent stabilization. Francisco Monaldi, a fellow in Latin American energy policy at Rice University's Baker Institute, says Quevedo appeared on television on Sunday claiming production had collapsed to 1.5 million barrels a day but was already recovering to almost 1.9 million. Monaldi adds that he still hears the collapse is "massive" but also suspects figures for January might show slight improvement, especially as Baker Hughes reported an increase in the number of rigs operating there that month, up from 40 to 50.
As so often, the truth likely lies somewhere in between those two figures that OPEC published. What is clear is that, as I wrote here,
Venezuela's suffering aids its fellow members in their efforts to take supply off the market.
Taking the midpoint of the two figures and comparing it to the supply cuts agreed in late 2016,
Venezuela's compliance level is now above 400 percent. Factoring in the wildcards of Libya and Nigeria, OPEC's net cut versus the baseline agreement stood at around 910,000 barrels a day in December. Venezuela accounted for four out of every 10 of them. The rally in oil prices owes something to economic growth, OPEC's maneuvering, and speculative zeal. Increasingly, it also rests on sheer misery in this one corner of the world.
https://www.bloomberg.com/gadfly/articles/2018-01-18/venezuela-s-oil-production-collapse-bad-news-worse-news
Other nations don't have to cut their output to increase oil prices, because Venezuela is doing all of that for them.
