Venezuela’s oil minster Eulogio Del Pino said current global oil supplies need to drop at least 10% before supply would match consumption.
In an interview with PDVSA, the country’s state-owned oil company, Del Pino said on Monday that a fair oil price would be around $70/bbl. “Global production is at 94 million barrels per day, of which we need to go down 9 million barrels per day to sustain the level of consumption,” he said.
Del Pino’s comments come just a day after Venezuelan President Nicolas Maduro said that OPEC and other major oil producers were close to reaching a deal on price stability. Global oil prices rose the day after Maduro’s comments, but only modestly, up just 1%.
Major oil producers will meet on the sidelines of an energy forum to be held in Algiers next week. Speculation has swung widely over the possibility that producers could actually agree on a production cap. Two weeks ago, OPEC de facto leader Saudi Arabia and Russia, the world’s two largest oil producers, agreed that something had to be done to prop up prices, since then that rhetoric has been toned down.
Other OPEC members, Nigeria, Libya, Iraq and Iran, have different ideas.
Both Nigeria and Libya need to ramp up production to offset oil revenue losses due to trouble with insurgents that have hit both country’s economies hard. Iran, which is close to reaching pre-sanction output levels of 4 million bpd, could possibly agree to a cap this time (in April Iran caused a production cap freeze deal to fall apart by its non-attendance). Iraq, for its part, is still a wildcard.