FxWirePro: Oil bulls likely to find support in Venezuela’s dwindling production

In the coming months, Venezuela’s dwindling oil production is likely to support the oil bulls. Ironically, Venezuela has the world’s largest oil reserve, however, the crisis has led the country to a situation where it is starving of gasoline. The data from OPEC shows that the production has been dwindling for quite some time now.

Dwindling production:

• Back in 2015, Venezuela was producing about 2.32 million barrels per day, which declined to 2.15 million barrels per day in 2016.
• In the first quarter of last year, the production declined further to 2 million barrels per day and 1.96 million barrels in the second. In the third quarter, it dropped further to 1.93 million barrels per day.
• According to OPEC’s November production report, Venezuela produced around 1.83 million barrels per day.

The latest Platts’ survey suggests that the production decline is gathering pace as in December the country produced around 1.7 million barrel per day.

As the economic crisis continues to tighten its grip on Venezuela, the oil market is likely to feel the heat sooner or later.