Global oil markets are tightening quickly on falling supplies from Venezuela, which posted 2017’s biggest unplanned output fall and could see a further decline in 2018, the International Energy Agency (IEA) said on Friday.
Debt and infrastructure problems cut Venezuela’s output in December to 1.61 million barrels per day (bpd), somewhere near a 30-year low. That helped oil prices climb above $70 per barrel in early January, their highest level in 3 years.
“The general perception that the market has been tightening is clearly the overriding factor and, within this overall picture, there is mounting concern about Venezuela’s production,” the IEA, which coordinates energy policy in industrialised nations, said in its monthly report.
“Given Venezuela’s astonishing debt and deteriorating oil network, it is possible that declines this year will be even steeper… U.S. financial sanctions are also making it tougher for Venezuela’s oil sector to operate,” the IEA said.
As a result of lower Venezuelan production, the IEA said OPEC’s crude output in December fell to 32.23 million bpd, boosting the group’s compliance with a deal to curb output to 129 percent. (Reporting by Dmitry Zhdannikov; editing by Jason Neely)