Venezuela Production To Fall To 1.9 Million Barrels Per Day - Oil Markets Daily

| About: The United (USO)
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Summary

PIRA estimates that Venezuela's oil production will fall to 1.9 million b/d.

Consensus pegs Venezuela production at 2.2 million b/d by year-end.

Nigerian June oil exports were above May figures -- what infrastructure damage?

Venezuela

PIRA, an energy consultant firm, is coming out with a non-consensus call for Venezuela's oil production to fall to 1.9 million b/d later this year.

Source: Stock photo.

This is in sharp contrast to what Venezuela is estimating and what sell-side analysts have modeled into their forecasts. Consensus forecasts pin Venezuela oil production around 2.3 million b/d and are forecasting a decline to just 2.2 million b/d. We highlighted in this write-up that Venezuela's oil production was really at 2 million b/d, and not the 2.37 million b/d it claims.

A big part of the reason why we think Venezuela is over-inflating its oil production is because it wants a better oil for loan deal with China. We think the Chinese know that Venezuela is over-inflating its figures, and current news reports point to a potential renegotiation of the terms. We applaud PIRA for sticking its neck out while the consensus remains confused. PIRA's expertise in the oil and gas industry gives weight to its calls, and we follow them extremely closely.

Nigeria Exports the Same?

There are currently conflicting reports out of Nigeria. We have the NDA reporting multiple attacks on Nigeria's oil infrastructure, but export figures show no slowdown. What gives?

Source: ClipperData

Traders we've spoken to have pointed to disruptions in Nigeria's oil (NYSEARCA:USO) production, but from what we are seeing in the export figures there appears to be no slowdown at all. We think the current conflicting reports on export figures and production figures we're hearing creates additional uncertainty surround this issue. Is the NDA really blowing up pipelines? Or was this all orchestrated for OPEC in exchange for the "president seat"?

Export figures could come from storage, so will the outages finally hit Nigeria's export in the coming months? We will see.

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