Published On: Wed, Nov 26th, 2014

Venezuela wants oil price back up to $100 a barrel

RamirezVIENNA, Austria - Venezuela wants oil prices to return to $100 a barrel, the country’s foreign minister said on Tuesday, ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC).

Speaking to reporters, Rafael Ramirez, who will represent Venezuela at the gathering on Thursday, said “the [oil] price has to be $100 per barrel, [that] is a fair price.”

However, OPEC members have reportedly indicated that they will not cut production in order to boost prices, apparently amid some sentiment that Venezuela is the author of its own economic misfortune and it is not up to other members of OPEC to rescue it, especially when Caracas has shown little willingness in the past to join in production cuts in order to defend the price of oil.

Following a meeting between Ramirez and fellow OPEC member Saudi Arabia and envoys from Russia and Mexico, two key oil producers outside the group, the price of Brent crude, the global benchmark, was quoted at $78.40 a barrel, down 1.6%.

It therefore seems likely that Venezuela will have to get through its economic meltdown without the help of higher oil prices.

In the past year the country's inflation rate has grown to about 64%, its oil export basket has fallen over $30 to $68.97 (a four-year low), and currency reserves are at an all-time low.

The country needs the average price of oil at about $85 to pay for imports and keep up with its debt. Household goods like toilet paper are scarce in the country, and shoppers wait in long lines for government supermarkets.

The nation’s dollar-denominated notes have lost 25 percent in the past three months, the most in emerging markets, as the biggest plummet in the price of Venezuelan crude since the global financial crisis in 2008 deepens concern the government will default. Yields on the country’s benchmark bonds due 2027, which reached a six-year high this month, have soared 5.29 percentage points to 18.4 percent over that span.

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