Philadelphia, January 4, 2017 (venezuelanalysis.com) –Venezuela’s state oil company, PDVSA, began on Sunday a 95,000 barrels per day (BPD) reduction in its crude output as part of a production cap agreement brokered by the Organization of Petroleum Exporting Countries (OPEC) in November.
Under the terms of the much-anticipated deal, OPEC members and 11 non-OPEC producers agreed to slash output by 1.8 million BPD effective January 1 in a bid to stabilize the international crude market.
“PDVSA, in fulfillment of the agreements reached by the Bolivarian Republic of Venezuela, reiterates its commitment to adhere to the decisions taken by her and contribute to the benefits and stability of the world oil industry,” the state oil giant said in a statement.
Venezuelan Oil Minister and PDVSA President Eulogio Del Pino has suggested that the global output cut would take effect within 100 days, raising benchmark Brent crude to between US $60 and $65 with heavier Venezuelan crude hovering between $45 and $55.
Markets have responded favorably to the implementation of the OPEC deal with Brent crude climbing 2.15 percent to $58.04 per barrel on Tuesday.
Venezuelan crude prices have rallied since the announcement of the deal in late November, increasing by 17 percent in December alone, according to preliminary Venezuelan Oil Ministry figures.
Over the course of 2016, the value of Venezuelan oil has increased by 82 percent, rising from a record $24 low in the first trimester of the year to nearly $45 in December.