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

The headquarters of the Organisation of the Petroleum Exporting Countries (Opec) is seen in Vienna November 29, 2016. — Reuters pic
The headquarters of the Organisation of the Petroleum Exporting Countries (Opec) is seen in Vienna November 29, 2016. — Reuters pic

LONDON, April 10 — Venezuela told Opec that the country’s oil output sank to a new long-term low last month due to US sanctions and blackouts, deepening the impact of a global production curb and further tightening supplies.

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

In a monthly report, the Organisation 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 and other non-member producers are reducing output by 1.2 million bpd from January 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, signalled on Monday that Russia wanted to raise output when it meets Opec in June because of improving market conditions and falling stockpiles.

In a development that will ease Opec concern about a new supply glut, the report today said oil inventories in developed economies fell in February, after rising in January. — Reuters