Venezuela cuts oil production by 500,000 barrels a day

by The Associated Press

Venezuela has reduced oil production by 500,000 barrels a day after a slowdown in exports allowed storage tanks to be filled to capacity, a manager at the state oil monopoly said Feb. 28.

Crude output is now 1.6 million barrels a day, down from 2.1 million earlier this week, said Luis Marin, manager of Petroleos de Venezuela S.A.'s eastern division.

PDVSA has contracted extra ships to export the oil, and the problem should be resolved the first week in March, Marin told state news agency Venpres.

Venezuela is struggling to recover from a two-month strike by opponents of President Hugo Chavez, who are demanding early elections.

Oil production dropped to 200,000 barrels a day at the height of the strike, which began Dec. 2 and petered out this month.

Former PDVSA executives — fired for joining the strike — said Feb. 28 that production was 1.1 million barrels a day.

The lingering effects of the strike and expectations of U.S.-led attack on Iraq have helped push international oil prices to 12-year highs. Crude dropped to US$37.15 on the New York Mercantile Exchange Feb. 28, after soaring to US$39.99 a barrel Feb. 27.

Chavez said Feb. 28 that US$30 a barrel was a “perfect” price for oil.

“We have to sell oil at a fair price. $30 a barrel? Perfect,” Chavez told state television station Venezolana de Television while touring an electricity plant in southeastern Venezuela.

His comments came 12 days before OPEC meets in Vienna, Austria to discuss whether to adjust production quotas. Chavez did not say what the Organization of Petroleum Exporting Countries should do.