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Oil May Be Down But It’s Certainly Not Out

Oil May Be Down But It’s Certainly Not Out

After five bearish weeks for…

Ecuadorian Oil Is Back Online

Ecuador Oil

Ecuador has restarted crude oil exports after massive protests caused the country’s oil industry to more or less grind to a halt.

 “All exports that were suspended will be rescheduled in the coming days to comply with all the obligations that the company maintains,” Reuters cited Ecuador’s state energy company Petroecuador as saying in a statement.

The protests were ignited by a set of austerity measures the Ecuadorean government wanted to implement as part of efforts to reduce its fiscal deficit. They were a condition for the Andean country to get a $2.4-billion loan from the International Monetary Fund.

However, the measures included the removal of fuel subsidies that led to a 120-percent spike in prices at the pump. This sparked the anger of indigenous groups and farmers who led the protests that began on October 3.

The scale of the protests forced state oil companies to shut down production at 20 fields and suspends exports, with Ecuador losing a total 1.5 million barrels of oil production over the two weeks the protests lasted, with protesters occupying some fields. The protests ended on October 13, when Lenin Moreno’s government agreed to repeal the subsidy removal.

Now, state-owned Petroamazonas says it would need over $48 million to repair the damages to its production infrastructure caused by the protesters.

Ecuador, which produces some 545,000 bpd, has reserves estimated at 8.27 billion barrels. Most of the oil it produces is shipped abroad. The country earlier this year said it would leave OPEC effective next January as it seeks to boost oil production and oil revenues.

How successful it would be is uncertain. Despite the protests and the removal of 400,000 bpd or so from international markets as a result of those protests, oil prices have remained largely indifferent to events in Ecuador, traders’ focus on the Middle East as usual.

By Irina Slav for Oilprice.com

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