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Recession-struck Venezuela will send a new proposal to OPEC and non-OPEC producers to try to stabilize crude oil prices, Venezuelan President Nicolas Maduro said on Sunday.
“Venezuela, as of next week, will circulate a letter with a new proposal, a new formula for the stability of real and just prices so that it can be studied and debated by all the governments that have signed this deal,” the president said in a speech, without providing details, as quoted by Reuters.
Venezuela was one of the most vehement supporters and promoters of OPEC’s supply-cut deal, in which OPEC and 11 non-cartel producers pledged to reduce oil production by a total of almost 1.8 million bpd, of which 1.2 million would come from OPEC and 558,000 from non-OPEC producers, including Russia.
Just before the January 1 start date for cuts implementation, Venezuela said it would begin reducing output by 95,000 bpd, the volume it had promised to remove from the market as part of the deal.
Now Venezuela’s Socialist president Maduro insists that the heads of state and government of all countries that signed the supply-cut pact meet in the first quarter of 2017 to discuss its strategy for the oil market.
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Maduro’s obsession with ‘fixing’ the oil market is not surprising, all the more that low oil prices have severely battered Venezuela’s struggling economy that relies on oil for 90 percent of its export revenues. Oil sales make up almost all of the country’s foreign exchange income.
Meanwhile, the Joint Ministerial Monitoring Committee (JMMC) tasked to oversee compliance to the agreement will hold its first meeting at the OPEC Secretariat on January 22. Since no official production data would be available yet, the committee is expected to mostly discuss how to monitor compliance to the deal. OPEC has never been great with adhering to its deals, and an OPEC source said last week that even 50 percent compliance would be “acceptable”.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.