The price of Venezuela's basket of oil and refined products fell 9.1 percent to $31.36 a barrel, a four-year low, a day after the country's legislature passed a budget based on $60 oil.
The country, which provides 11 percent of U.S. oil imports, needs higher output and higher prices to balance its books next year. Venezuela pushed last month for the Organization of Petroleum Exporting Countries to cut output to arrest the price declines.
| That's going to hurt the 'needs higher output' part of the equation unless we assume that Hugo is the only one who would cheat on his quota ... |
The current oil price is 48 percent below the $60-a-barrel assumption. The budget also assumes that output will grow rather than shrink as would be required by an OPEC cut.
"This budget is overblown, based on indicators that aren't accurate and based on production that doesn't take into consideration the coming OPEC cuts," Pastora Medina, a lawmaker in the country's National Assembly, said yesterday during the budget discussion.
Venezuelan oil sells at a discount to the benchmark West Texas Intermediate, which fell $1.47, or 3.1 percent, to $46.51 as of 1:05 p.m. in New York. It has fallen 68 percent since touching a record $147.27 a barrel July 11. |