Venezuela reports collapse in oil supply, tightening global market: OPEC

U.S. | 1/29/2019 | Alex Lawler
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LONDON (Reuters) - Venezuela’s oil output sank to a new long-term low last month due to U.S. sanctions and blackouts, the country told OPEC, deepening the impact of a global production curb and further tightening supplies.

Supply cuts by OPEC and partners led by Russia, plus involuntary reductions in Venezuela and Iran, have helped drive a 32 percent rally in crude prices this year, prompting pressure from U.S. President Donald Trump for the group to ease its market-supporting efforts.

Report - Wednesday - Organization - Petroleum - Exporting

In a monthly report released on Wednesday, the Organization of the Petroleum Exporting Countries said Venezuela told the group that it pumped 960,000 barrels per day (bpd) in March, a drop of almost 500,000 bpd from February.

The figures could add to a debate within the so-called OPEC+ group of producers on whether to maintain oil supply cuts beyond June. A Russian official indicated this week Moscow wanted to pump more, although OPEC has been saying the curbs must remain.

OPEC - Russia - Producers - Output - Bpd

OPEC, Russia and other non-member producers are reducing output by 1.2 million bpd from Jan. 1 for six months. The producers are due to meet on June 25-26 to decide whether to extend the pact.

One of the key Russian officials to foster the pact with OPEC, Kirill Dmitriev, signaled on Monday that Russia wanted to raise output when it meets OPEC in June because of improving market conditions and falling stockpiles.

OPEC+ - Cuts - Concern - Growth - Demand

OPEC+ returned to supply cuts in 2019 out of concern that slowing economic growth and demand would lead to a new supply glut. OPEC’s report said the economic backdrop was weakening and lowered its estimate of global growth in demand by 30,000 bpd to 1.21 million bpd.

“Newly available data has confirmed the recently observed downward trend in global economic activities,” the report said.

Development - OPEC - Concern - Glut

In a development that will ease OPEC concern about a new glut, the...
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