Venezuela’s downward spiral continues as its oil output drops dramatically

by | 19 Jan, 2018

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Venezuela is suffering

Venezuela’s oil output is collapsing at an accelerating pace, deepening a major economic and humanitarian crisis in a country beset by hyper-inflation and crippling shortages of food and medical supplies.

Yesterday OPEC’s latest monthly report showed Venezuelan oil production had suffered the biggest unplanned drop in history, falling by 82,000 barrels a day for December, taking output down to 1.745 million barrels per day. Worryingly, new oil data released by the Venezuelan government was even worse, as it said the country’s output fell by 216,000 barrels per day in the same month.

Over the course of 2017, oil production in the country fell by 29 per cent, losses that have only been mirrored previously in extreme circumstances such as in Russia after the collapse of the Soviet Union and in Iraq after the U.S. invasion in 2003. Both of these countries saw oil output fall by 23 per cent during these periods of unrest, less than Venezuela is currently facing. For a country that is so dependent on oil exports for economic stability, today’s figures will reconfirm the dire state Venezeula (formerly Latin America’s most prosperous economy) now finds itself in. 

The report came alongside news that EU officials were considering placing sanctions on top Venezuelan officials within the ruling Maduro regime. Venezuela is already facing tough economic sanctions from the U.S. which were signed into law by Donald Trump in late August last year.

In the oil market as a whole, prices slid this Friday putting them on course for the biggest weekly falls since October as a bounce-back in American production outweighed ongoing declines in crude inventories.

Related: How to make money from the bull run in oil prices even if you missed it so far

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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