Venezuela’s oil generates 95 percent of export revenue, will decline by about 11 percent to 2.1 million barrels a day by the end of the year, Barclays Plc estimates. The current level of a little below 2.4 million barrels a day is down 350,000 barrels from a year ago. That is nearly a million barrels below what it was in 1998 when Mr. Chávez took power.
Oil workers here say they are making less than a dollar a day because of the inflation. The price of bread alone has doubled from month to month, now about 50 cents a loaf in many places. The economy is set to contract by 10 percent by the end of the year and has already seen triple-digit inflation.
Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs.
Early this year, the United States began shipping more than 50,000 barrels a day of the light crude that Venezuela needs to prepare its own oil for export, joining a handful of suppliers that have become vital to keeping the country’s oil industry afloat.
International service companies like Halliburton and Schlumberger are scaling back their operations as Venezuela’s state oil company struggles to pay its debts to them — as much as $25 billion — with a flurry of bonds and promissory notes.
Global oversupply of 1 million to 2 million barrels per day since mid-2014 has caused the worst oil price crash in a generation. Prices have languished around $45 a barrel, though the market has started to rebalance as some exporters have reduced shipments due to lower prices.
Raymond James forecasts oil prices will increase to $80 a barrel in 2017. Piper Jaffray’s Simmons and Co. International raised its forecast last week, but only to $60 in 2017 and $70 in 2018. Raymond James cut its 2017 oil supply forecast by nearly 800,000 barrels per day, to about 96 million barrels. mMny believe drillers will put that higher revenue toward repairing their balance sheets rather than plowing it into new production. They are also predicting supply disruptions in Nigeria, Venezuela and Libya.
Sept 21,2016, Brent crude futures were up 92 cents, or 2 percent at $46.80 per barrel by 1:28 p.m. ET (1728 GMT), while U.S. West Texas Intermediate (WTI) crude futures climbed $1.13, or 2.6 percent, to $45.18 a barrel.
September, 2016 IEA oil market report
Global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 mb/d is expected – a downgrade of 0.1 mb/d on our previous forecast due to a more pronounced 3Q16 slowdown. Momentum eases further to 1.2 mb/d in 2017 as underlying macroeconomic conditions remain uncertain.
World oil supplies fell by 0.3 mb/d in August, dragged lower by non-OPEC. At 96.9 mb/d, global oil output was 0.3 mb/d below a year ago, but near-record OPEC supply just about offset steep non-OPEC declines. Non-OPEC supply is expected to return to growth in 2017 (+380 kb/d) following an anticipated 840 kb/d decline this year.
OPEC crude production edged up to 33.47 mb/d in August – testing record rates as Middle East producers opened the taps. Kuwait and the UAE hit their highest output ever and Iraq lifted supplies. Output from Saudi Arabia held near a record, while Iran reached a post-sanctions high. Overall OPEC supply stood 930 kb/d above a year ago.