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Venezuela Oil Price Continues Tumbling Venezuela's Ministry of Energy and Petroleum reports that the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending October 3 fell to its lowest price since January of 2011. The Latin American Herald Tribune notes that the Ministry continues to post an inaccurate average for the year and reduced the average price for the whole of 2013 by $1.41 without explanation.
CARACAS -- Venezuela's weekly oil basket fell to a 3 year low this week.
According to figures released by the Venezuela Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending October 3 was $85.89, down $0.76 from the previous week's $86.65.
WTI in New York averaged $92.00 -- down $0.16 -- for the week, while Brent crude traded in London averaged $95.09 -- down $2.14 from the previous week.
According to official Venezuelan government figures, the average price in 2014 for Venezuela's mix of heavy and medium crude is now $96.23, but according to calculations done by the Latin American Herald Tribune and investment bank Caracas Capital Markets (CCM), the government figure is incorrect and overstates the 2014 average. According to LAHT and CCM calculations, the Venezuela oil price average for 2014 should currently be $95.48. The Ministry has maintained that the price was $96.95 until 2 weeks ago without changing it since July 25, and then hasn't changed it for two weeks, despite the fact that the average price for all of August was just $91.74 and was $89.27 for September. Last week -- 9 months after the end of the year -- Venezuela changed the reported 2013 average price from $99.49 to $98.08 with no explanation.
In 2013, Venezuela's average oil price for the year was $98.08, down from 2012's $103.42 and 2011's $101.06, but higher than 2010's $72.43, and much higher than 2009’s average price of $57.01.
In 2013, WTI averaged $97.96 while Brent averaged $108.70. Prior to 2010, Brent and the heavier Venezuelan crude had historically traded below WTI.
At $85.89, Venezuela's oil price this week was below the low for Venezuela's oil basket in 2013 of $93.98, which was set during the week ending November 22. The low in 2012 was set during the week ending June 8 at $94.05. This is the lowest price that Venezuela's oil basket has had since January of 2011 during the beginnings of the Arab Spring.
Venezuela's basket set its highest weekly average on July 18, 2008, when it hit $126.46 before economies around the world began crashing under the weight of expensive oil and crashing sub-prime debt. By January of 2009, Venezuela's oil basket had fallen to a low of $27.10 a barrel.
The United States is the largest importer of Venezuela’s oil exports.
According to the US Department of Energy, Venezuela was the fourth-largest supplier of imported crude oil and petroleum products to the United States behind Canada, Saudi Arabia, and Mexico. U.S. imports from Venezuela have been on an overall decline in recent years. In 2013, the United States imported 797,000 bbl/d of crude oil and petroleum products from Venezuela, a decline of 49% from a decade ago.
Venezuela sends a large share of its oil exports to the United States because of the proximity and the operation of sophisticated U.S. Gulf Coast refineries specifically designed to handle heavy Venezuelan crude.
While U.S. imports of primarily crude oil from Venezuela have been on the decline, U.S. exports of petroleum products to Venezuela have increased largely because of Venezuela’s tight finances that leave it unable to invest and maintain its own domestic refineries. A decade ago, the United States exported 7,000 barrels per day to Venezuela. In 2013, the United States sent Venezuela 84,000 barrel per day of petroleum products, primarily methyl tertiary butyl ether (MTBE), intended for blending in gasoline, motor gasoline, and distillate fuel oil.
Oil is the main export of Venezuela and provides most of the country's foreign currency.
The U.S. Energy Information Administration estimates that in 2013 net exports from Venezuela totaled nearly 1.7 million barrels per day of crude oil and petroleum products, a significant decrease since the peak of 3.1 million barrels per day in 1997.
According to the Oil & Gas Journal (OGJ), in the beginning of 2014, Venezuela had nearly 298 billion barrels of proved oil reserves, the largest in the world. The next largest proved oil reserves are in Saudi Arabia with 266 billion barrels and Canada with 173 billion barrels.