Venezuela is doing the oil market a big favor. The country’s crude oil production has been in a free fall for few years now. This downward trend has accelerated further during the last two years due to low oil prices environment and the country’s political and economic situation.
According to the Organization of Petroleum Exporting Countries (OPEC)’s Monthly Oil Market Report for March, OPEC’s, Venezuela’s crude oil production for February 2018 was around 1.58 million barrel per day, that is around 787K bbl/day down from 2016’s oil production of 2.373 million barrel per day.
Besides OPEC/non-OPEC producers’ oil output cut deal which aims at easing the global oil glut and supporting oil prices recovery, Venezuela’s continuous oil production decline has also provided support to oil prices, and it is expected to continue to do so in the near to medium term.
The Way Ahead for Venezuela:
Looking at Venezuela’s monthly rig count -which has been falling over the past few months, it is expected that the country’s crude oil production will continue its downward trend as the country’s economic and political situation continue to get worse, which leads to reduced capital expenditures in the oil industry and consequently reducing activities in the oil sector.
