Venezuela Oil Exports Fall in September as the Price Also Tumbles. Here is Why
At the same time that Venezuela's crude exports are falling, the average price paid for Caracas crude is also tumbling. Here is why...
CARACAS -- The Joint Organizations Data Inititiative (JODI), overseen by the Riyadh, Saudi Arabia based International Energy Forum, reports that Venezuela's crude oil exports fell 12% to 1.38 million barrels a day (bpd) in September.
According to Venezuela state oil company Petroleos de Venezuela, S.A. (PDVSA), Venezuela's oil exports in September averaged $103.12, which was $7.63 below OPEC's average price for September exports of $110.75.
Venezuela joined fellow OPEC members Iraq, Kuwait, Nigeria, UAE, Angola, and Qatar in lower output in September.
UAE exports fell 2.5% to 2.58 million bpd. Nigeria exports fell 0.3% 2.14 million bpd. Kuwait exports fell 6% to 2.08 million bpd. Iraq exports fell 20% to 2.07 million bpd. Angola exports fell 8.4% to 1.53 million bpd.
OPEC members Saudi Arabia, Algeria and Ecuador increased exports.
Saudi Arabia increased crude oil exports 0.6% to 7.84 million bpd. Algeria increased exports 22.5% to 659,000 barrels per day. Ecuador increased exports 12% to 435,000 bpd.
OPEC members Iran and Libya did not submit data for the month.
JODI uses statistics supplied by national governments to compile data on production and imports. The data is for crude and condensates and does not include natural gas liquids.
OPEC members will meet in Vienna on December 4 to discuss production levels.
Last week, Reuters reported that Venezuela auctioned off 300,000 barrels of Bachaquero crude on the open market. It was reported that the shipment was sold at $20.50 below Brent's oil price and that 2 other shipments of heavy Laguna and Bachblend were also sold at a low price to U.S company Houston Refining.
Houston Refining was formerly known as Lyondell-Citgo Refining and Venezuela's Citgo owned 41.25% of the company until Venezuela sold it in 2006.
Houston Refining had a long term supply contract to purchase Venezuela crude but that contract expired in 2012, allowing it to purchase cheaper Canadian and Colombian crudes.
San Antonio, Texas-based NuStar Energy used to buy almost all of Venezuela's production of heavy Bachaquero crude for its 2 asphalt factories previously owned by Citgo, but NuStar has ended a 30,000 bpd supply contract with PDVSA early, NuStar said last week. The contract, originally signed in 2008 when NuStar bought the Paulsboro, New Jersey and Savannah,Georgia asphalt plants from Venezuela's Citgo, was not due to end until March of 2015.
"The deal will significantly reduce financial liability for NuStar Energy LP and will allow NuStar Asphalt Refining LLC the additional refining flexibility to meet current demand," according to Curt Anastasio, NuStar Energy's CEO about the agreement to end the supply contract early.
The end of these higher priced long-term contracts may be why the price of Venezuela's oil basket has dropped back where it traditionlly traded below the price of higher grade West Texas Intermediate (WTI) since August.
According to figures released 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 November 15 was $92.51.
WTI in New York averaged $94.10 for the week, while Brent crude traded in London averaged $106.60.