The fall in oil exports has starved the socialist government of President Nicolas Maduro of its main source of revenue, contributing to an economic collapse in the OPEC nation and leaving authorities short of cash for essential imports such as food and medicine.

Maduro has held onto power despite the sanctions, frustrating the administration of U.S. President Donald Trump. Washington and most Western democracies accuse Maduro of rigging a 2018 re-election vote.

Trump’s team has increased pressure in recent months, expanding its list of sanctioned entities to include Mexican companies, oil tankers, international shipping firms, and individuals that have played a role in Venezuela’s oil exports.

Tighter sanctions have scared away many remaining customers of state-run oil firm PDVSA, and some shipping firms that had carried their cargoes.

PDVSA and its joint ventures shipped a total of 17 cargoes in June, carrying about 379,000 barrels per day (bpd) of crude and refined products, according to Refinitiv Eikon data and the company’s loading schedules. The low volume, unseen since 1943, was almost 18% below May exports, according to the same data.

(For a graphic on exports by month, go here: tmsnrt.rs/2BgyyuM)

The country’s total crude output is slightly above those levels, according to daily PDVSA data seen by Reuters. PDVSA has had to cut output to match exports because most of the country’s oil storage is full.

That would put output at a little more than 10 percent of the nearly 3.5 million bpd the country pumped in the late 1990s. Back then, Venezuela was one of the powerhouses in the Organization of the Petroleum Exporting Countries. Now, Caracas is among the group’s minnows, even though it sits on some of the largest crude reserves in the world.

Sanctions have also left more than a dozen loaded tankers in limbo around the world as suppliers struggle to find final buyers for the cargoes. Several of those vessels are off the waters of Malaysia and Singapore.

Exports to Europe ticked up in June to 130,000 bpd, boosted by larger deliveries to Spain’s Repsol and Italy’s Eni, the PDVSA documents showed. Those shipments are permitted under exemptions for debt payments and swaps.

Shipments to Venezuela’s political ally Cuba also increased to 82,300 bpd from 67,000 bpd in May.

Heavy crude inventories at Venezuela’s Jose port, the country’s main oil terminal and storage site for exportable crude, closed the month at 14.5 million barrels versus a peak of 14.9 million barrels in mid-June, according to the PDVSA data.

Venezuela’s fuel imports also declined last month, to 66,000 bpd from 77,100 bpd the previous month as most arrivals of Iranian gasoline discharged in May.

The post Venezuela’s oil exports sank in June to 77-year low: data first appeared on Garner Ted Armstrong Evangelistic Association.

“Oil prices are finely balanced in today’s trading session. Ongoing protests in Iran, together with recent detention of several princes in Saudi Arabia, have reinvigorated geopolitical concerns,” Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

“However, prospects for further increases in US oil production amid recent improvements seen in oil prices continue to promote bearish sentiment,” Mr Kumar said.

Brent futures gained 16 cents, or 0.2 per cent, to settle at US$67.78 a barrel, while US West Texas Intermediate (WTI) crude rose 29 cents, or 0.5 per cent, to settle at US$61.73.

Last week, both contracts rose to their highest since May 2015 with Brent at US$68.27 and WTI at US$62.21.

US production C-OUT-T-EIA is expected soon to rise above 10 million barrels per day, largely thanks to soaring output from shale drillers, according to federal energy data.

Only Russia and Saudi Arabia produce more.

“The US oil price is now into a range that is anticipated to attract increased shale oil production,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months,” Mr Spooner said.

US drillers reduced the number of oil rigs operating by five in the week to Jan 5, the first decline in three weeks, according to a report by energy services firm Baker Hughes on Friday.

Rising US production is the main factor countering output cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries and by Russia, which began in January 2017 and are set to last through 2018.

A senior Opec source from a major Middle Eastern oil producer said Opec was monitoring unrest in Iran, as well as Venezuela’s economic crisis, but will boost output only if there are significant and sustained production disruptions from those countries.

Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore, said “the Opec versus shale debate will rage” this year, being a key price-driving factor.

However, Mr Innes added that Middle East turmoil would remain a key focus for oil markets and had the potential to “send oil prices rocketing higher.”

REUTERS

Source: http://www.businesstimes.com.sg/energy-commodities/oil-mostly-flat-as-rising-us-output-offsets-opec-worries

The post Oil mostly flat as rising US output offsets Opec worries first appeared on Garner Ted Armstrong Evangelistic Association.