Oil prices fell early in the week after some Opec producers and Russia suggested the group will increase production quotas when it meets in Vienna later this month. But the dip was short-lived as the market switched focus to collapsing Venezuelan production and the threat to Iranian output from new US sanctions. Venezuela’s national oil company, Petroleos de Venezuela (PDV), could be about to declare force majeure on its shipments, with several consumers reportedly notified that they will not receive contracted volumes this month. Venezuelan oil production has already fallen from more than 2 million barrels per day as recently as 2015 to around 1.3 million b/d currently. The decline is likely to accelerate now that US oil firm ConocoPhillips has won court approvals to seize PDV assets in the Dutch Caribbean. The European Investment Bank has meanwhile said it has no choice but to adhere to new US sanctions on Iran, dealing another blow to Europe’s efforts to maintain investments in the Islamic republic and keep the Iran nuclear deal alive. International benchmark Brent closed at $77.32 per barrel on Thursday, down 27￠/bbl on the week while US domestic price-pin WTI finished the week at $65.92/bbl for a much steeper loss of $1.12/bbl. Higher oil prices are testing Opec/non-Opec’s unity at a time when untethered US output shows no sign of slowing. Nonetheless, Opec’s latest Annual Statistical Bulletin published Jun. 7 showed the producer group’s revenues at a three-year high of $578.3 billion in 2017. That was a 28% increase on 2016 revenues, before the pact to curb output with a group of non-Opec countries including Russia came into force on Jan. 1, 2017.
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