Venezuela’s Chavez Wants High Oil Prices
The Venezuelan government and President Hugo Chavez are very concerned that OPEC (Organization of Petroleum Exporting Countries) members are exceeding their quotas and oversupplying the markets.
Venezuela, also an OPEC member, plans to bringing up this issue at the OPEC meeting in Austria next week.
OPEC sets supply quotas to try to stabilize prices as high as they can without hurting economic growth. However an oversupply would force prices down and significantly hurt countries like Venezuela whose economy is heavily reliant on the oil wealth. Chavez’s government’s own survival is dependant on their oil wealth to pay for their large social welfare programs.
Chavez called on OPEC members to maintain a “fair level” of production that would keep oil prices around $100 per barrel.
While Chavez did not specifically name anyone who is exceeding quotes, some countries are opening supplying more oil. Saudi Arabia has been admittedly increasing their output to make up for the losses due to Iranian sanction.
Crude Oil prices closed the week at $84.10 per barrel – around the lowest price since October 2011.
The price of U.S. benchmark crude ended the week at $84.10 a barrel in New York, near its lowest level since October.
Chavez says OPEC members should maintain what he calls a “fair level” of oil prices. He says that should be about $100 a barrel.
