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Venezuelan Oil Supply Surges, Crude Prices Drop

Venezuelan oil production in November grew by more than 20 percent in comparison to the previous month, registering its high since imposing tougher U.S. sanctions against state-owned oil company PDVSA, according to two sources familiar with PDVSA situation.

Photo: Reuters

Crude supplies averaged between 926,000 and 965,000 bpd in November, sources said, exceeding October result of 761,000 bpd, which was reported by OPEC to PDVSA. Exports jumped to over 1 million barrels per day.

Crude extraction in Venezuala exceeded 900,000 bpd for the first time since August 2019, when Washington authorities delivered warning over foreign companies continuing to work with PDVSA that the U.S. could impose sanctions in case of cooperating with Venezuala’s PDVSA. Recall, the Trump administration imposed sanctions on the PDVSA for the first time in January 2019 aiming to force Venezuelan President Nicolas Maduro to resign.

This led many companies, especially in China, to avoid buying Venezuelan oil, which led to an increase in stocks in the country and a reduction in PDVSA production.

Meantime, oil prices remained steady in run-up to OPEC monthly report for November due to be released later on Wednesday. U.S. light oil futures with delivery in January dropped by 0.49 percent, to $58,95 per barrel, while Brent benchmark eased by 0.53 percent, to $64,01 per barrel at 9.28 GMT.

One should mention, that the PDVSA reading directly presented to OPEC on monthly basis this year significantly exceeded the secondary sources estimates. Export volumes in the first week of December remained high, Refinitiv data showed, despite the fact that three out of four PDVSA facilities for oil refining were not operated.