After Delay, Venezuela Publishes Tumbling Oil Price

Venezuela's weekly oil basket fell to a new 5 year low this week.

According to figures released 3 d...

Venezuela's weekly oil basket fell to a new 5 year low this week.

According to figures released 3 days late 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 December 12 was $57.53, down $4.39 from the previous week's $61.92. No explanation was given for the delay, but the price was higher than analysts expected. Maduro had revealed earlier in the week that the average price as of Tuesday was $58. The previous week the Venezuela basket fell $6.16.

WTI in New York averaged $62.72 -- down $4.53 -- for the week, while Brent crude traded in London averaged $66.00 -- down $4.56 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 $91.17, but that figure was not changed and is incorrect. Investment bank Caracas Capital Markets calculates that the average for 2014 should be approximately $90.29. After notices by the Latin American Herald Tribune and Caracas Capital Markets that the government figure was incorrect and overstated the 2014 average., the figure was previously corrected in September after being wrong for 3 months.

Also in September -- 9 months after the end of the year -- Venezuela changed the reported 2013 average price from $99.49 to $98.08 with no explanation.

With the September change, Venezuela's average oil price for 2013 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.

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 barrels 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.

Latin American Herald Tribune |

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