- Oil price decline has led to shortages of food and medicine
- Crude ‘can and needs to rise to $70 a barrel,’ president says
Venezuelan President Nicolas Maduro said he spoke to Saudi Arabia’s king about boosting oil prices and is reaching out to the heads of state of fellow producers Russia, Iran and Qatar as his country reels under the crude crash.
Venezuela, holder of the world’s biggest oil reserves, wants to stabilize prices that fell to a four-month low last week, Maduro said on state-run television Tuesday night. The longer-term goal is crude at around $70 a barrel, he said.
Cash-strapped Venezuela has seen its economy implode over the past two years as global crude prices declined, with shortages of food, medicine and other basic goods fanning public discontent with the president. Alberto Ramos, an economist at Goldman Sachs Group Inc., said in a July 22 note that the country has fallen into a “depression” with signs of hyperinflation.
“The price of oil, for necessity, can and needs to rise to $70 a barrel," Maduro said. “It’s easy. The economy would assimilate that price perfectly, and it would be a motor for economic growth worldwide. We have a plan that’s been assumed and approved by OPEC and non-OPEC producers, and we’re going to keep building consensus about the plan."
Weak demand may persist as the summer driving season ends in the U.S. and fuel inventories stay high, the Organization of Petroleum Exporting Countries said in its monthly report Wednesday. The group will hold informal talks on the sidelines of a conference in Algiers next month, though OPEC has shown no signs of ditching the Saudi-led strategy of letting prices fall to maximize market share.
Maduro said he plans to talk with the emir of Qatar and was seeking meetings over the next two months with Russian President Vladimir Putin, Iranian President Hassan Rouhani and Ecuador’s President Rafael Correa. The country’s crude production fell to 2.1 million barrels a day in July, its lowest since 2003, according to the OPEC report.
“We’re on the path to the necessary stabilization at a moderate point, and I hope a high price, in a process of market equilibrium," Maduro said.
Brent, the global benchmark crude, fell 38 cents to $44.60 a barrel on the London-based ICE Futures Europe exchange at 11:10 a.m. New York time.