Americas News
Venezuela in Renewed Effort to Raise Oil Prices as OPEC Output Slips in July
Eulogio del Pino, oil minister for Venezuela, is once again hoping to persuade the Organization of the Petroleum Exporting Countries (OPEC) to try and boost global oil prices, which would help counteract the economic chaos his country has been suffering since the market collapse of 2014.
Nicolas Maduro, president of the troubled republic, told state TV that del Pino spoke to OPEC secretary general Mohammed Barkindo ahead of a meeting between the cartel and non-OPEC producers: "We are making efforts for a new meeting soon between OPEC and non-OPEC members, with Russia at the head ... to stabilize the price towards $40 (per barrel) and over $50 and $60."
Maduro did not disclose any further details of the meeting.
Del Pino has previously raised the possibility that a production freeze could be discussed between OPEC and non-OPEC members in Algeria in September, despite past failed attempts at reaching a freeze and widespread sentiment from analysts that only deep production cuts and not a freeze could boost prices.
Meanwhile, even though Gabon joined OPEC last month and helped increase the cartel's total July production to 33.24 million barrels per day (bpd) from 33.11 million in June, output excluding Gabon fell by 80,000 bpd, seemingly due to militant attacks in Nigeria and political disputes in Libya rather than any intentional efforts.
According to Bloomberg data, Nigeria's output for July declined by 70,000 bpd; Libya declined by 20,000 barrels, and Saudi Arabian daily output fell by 40,000 barrels.
While these declines are likely temporary and won't positively impact prices to the degree that Venezuela is hoping for, they contradict a Reuters survey last week that predicted OPEC production in July would rise to its highest in recent history due to Iraq's vigorous contribution and Nigeria achieving additional crude exports despite the militant attacks (Reuters also postulated that Saudi Arabia was close to record high output as it met seasonal domestic demand).
Meanwhile, oil prices rose nearly 3 percent on Thursday after a modest stockpile drop at the U.S. crude futures delivery hub, with West Texas Intermediate settling at $43.93 per barrel.
This caused short-term jubilation for people such as Salvatore Recco, COO for Gravity Investments, who told Reuters, "We're sitting pretty, with our customers extremely happy at having profited from WTI option hedges at under $40, and are now long again for $45-$55 levels."
While Venezuela's bid to persuade OPEC to boost oil prices may strike observers as desperate, the logic seems inconsistent given that del Pino and Maduro have both repeatedly stated they will increase production in order to meet new OPEC quotas, with the former remarking, "We are not tied to any dogma of reducing production."
