Venezuela, the OPEC member, whose economy has all but collapsed under the cartel's pre-cutback production frenzy that decimated crude prices, says it will reduce output by 95,000 barrels per day (bpd) in the New Year.
The country's Energy Ministry on Tuesday stated, «Without prejudicing its international contractual obligations, from January 1 2017, PDVSA and/or its subsidiaries will implement a reduction in the volumes of its main crude sale contracts, all in conformity with existing terms and conditions.»
The country's oil minister Eulogio Del Pino said the OPEC deal overall should cause a re-balancing of inventories and that Brent crude will settle at around $60-$70 per barrel, with Venezuela's crude basket hovering between $45-$55 per barrel.
Meanwhile, Nicolas Maduro, president of Venezuela, is gearing up for a tour of other producing nations to rally support for the OPEC agreement, which will supposedly lower cumulative production by about 1.8 million bpd. Without giving details, he said, «I am proposing a new system, a new formula, to fix markets and oil prices to enable stability, harmony, continuity; I aspire to at least 10 years of stability with realistic, fair prices of oil, and I am going to achieve it.»
Maduro has gone on record with many promises and predictions in 2016: in June, he vowed that his country would increase production as a result of new quotas set by OPEC, but he wouldn't divulge details about the quotas or explain how his troubled nation could meet them.
Several months later he shifted tack and called for OPEC to consider freezing production in a bid to stabilize oil prices at $40 per barrel - even though in other public statements he said OPEC should try to return prices to $70 per barrel (he subsequently declared that $50-$60 oil would benefit his country's economy).
In a report released in August 2016, Columbia University's Center on Global Energy Policy states, «Venezuela will represent a growing supply risk for oil markets in 2017; while on average crude oil exports in the first half do not yet show an important decline from the same period a year ago, the latest data point to a deteriorating trend.»