Caracas lifts veil on economic data, Oslo talks end
Venezuela's central bank published macroeconomic data for the first time in over three years, affirming that the oil-based economy shrank by 47.1pc in real inflation-adjusted terms from third quarter 2015 through third quarter 2018.
Oil GDP alone contracted over 44.2pc during the three-year period, the government-controlled bank said.
The data release followed 14 consecutive quarters without information. The bank did not explain why the information was abruptly released now.
The release coincided with sensitive negotiations between the Venezuelan government and the political opposition with the mediation of the Norwegian government in Oslo. The talks that started on 27 May ended today with no agreement. It was not immediately clear if the two sides agreed to meet again.
The data blackout was imposed in October 2015 by the bank's former president, Nelson Merentes, who claimed at the time that suspending publication of official quarterly macroeconomic numbers was necessary to counteract an alleged US-led "economic war" against Venezuela.
The updated figures issued by the bank yesterday, combined with previously released official data, show that Venezuela's oil export revenue tumbled from $66.5bn in 2013 to $29.8bn in 2018.The plunge was attributed to a combination of weaker oil prices and falling crude production that the bank blamed mainly on US sanctions. The newly released data did not include oil export revenue for the first four months of 2019.
Independent Venezuelan economist Tamara Herrera and opposition-controlled National Assembly deputy Jose Guerra said the government is under pressure from multilateral entities led by the International Monetary Fund (IMF) and World Bank that would refuse to engage in any economic assistance and new loan discussions until Caracas refreshed its official data.
Officials representing three opposition parties, including self-declared interim president Juan Guaido's Popular Will (VP), tell Argus that Maduro may have ordered the bank to publish the macroeconomic numbers as a show of goodwill during the Oslo talks.
Two opposition leaders critical of the talks said it is also possible that disgruntled bank officials decided to publish the data independently.
The bank's updated quarterly data shows that Venezuela's economy as of the end of the third quarter 2018 had contracted nearly 48pc in real inflation-adjusted terms since Maduro was elected president in April 2013.
Venezuela's inflation-adjusted GDP contracted 22.4pc in full-year 2018, with first quarter 2019 GDP shrinkage estimated at over 19pc compared with a first quarter 2018 decline of 15.7pc, the bank reported.
Based on the official numbers, Venezuela's economy at the end of March 2019 had regressed to levels last recorded in the early 1940s.
Consumer price index data shows that official inflation of 180.9pc in 2015 climbed to 274.4pc in 2016, then in 2017 to 862.6pc and in 2018 to over 130,000pc.
The central bank reported monthly inflation during the first four months of 2019 at 196.6pc in January followed by 114.4pc in February, 34.8pc in March and 33.8pc in April, suggesting that inflationary pressures have eased significantly since the start of this year.
Two economists who work with political opposition acknowledged that inflationary pressure has eased in recent months in response to weaker consumer demand, fueled partly by the flight of some 5mn Venezuelans since 2013, coupled with the Venezuelan economy's de facto dollarization.
Venezuela's non-oil GDP shrank over 46.4pc from third quarter 2015 through the end of third quarter 2018, the bank said. The worst-performing economic sectors were construction (-89.3pc), commerce and services (-74pc), banking and insurance (-73.6pc) and manufacturing (-68.8pc).
More international talks next week
Ministerial delegations from the EU-led International Contact Group (ICG) and the Lima Group will meet on 3 June in New York to discuss the crisis in Venezuela. The ICG delegation will be headed by European Commission foreign affairs high representative and vice president Federica Mogherini and include the foreign ministers of Portugal and Uruguay. The Lima Group delegation will include the foreign ministers of Canada, Chile and Peru.
Both groups are seeking a seeking a peaceful resolution of the standoff between Guaido and Maduro.
The US government, Juan Guaido´s leading backer, appears skeptical of the Oslo talks, which Venezuelan critics fear could be exploited by Maduro to remain in power. "We believe the only thing to negotiate with Nicolas Maduro is the conditions of his departure," the State Department said on the eve of the talks on 25 May. "We hope the talks in Oslo will focus on that objective, and if they do, we hope progress will be possible."
Related news posts
N Dakota Jan oil output down 13pc on cold snap: Update
N Dakota Jan oil output down 13pc on cold snap: Update
Adds regulator comment and completion details starting in fourth paragraph. Calgary, 14 March (Argus) — Crude production in North Dakota fell by 13pc in January as a cold snap forced producers to shut in wells, according to the state regulator today. North Dakota producers pumped out 1.1mn b/d of oil in January, down by 171,000 b/d from December, the state Department of Mineral Resources (DMR) said Thursday. January's oil output was the lowest since January 2023 when 1.06mn b/d was produced. The decline was expected after severe cold weather in mid-January knocked off an estimated 650,000-700,000 b/d of oil output in the US' third-largest producing state. "Winter really can bite here in North Dakota," DMR director Lynn Helms said. Production has since recovered to about 1.3mn b/d this week, Helms said. January natural gas output meanwhile plunged to 3 Bcf/d (85mn m³/d), down by 15pc from a month earlier but 6pc higher than the same period in 2023. The gas capture rate for the state — the percentage of natural gas not flared during production — was 93pc for January, falling from 95pc a month earlier but still above the state target of 91pc. Gas that was flared because of pipeline constraints amounted to 6pc of production, while the remaining 1pc was flared from wells with zero sales. Spot gas prices at the Northern Border Ventura Transfer location, an indicator for the price of Bakken gas production, averaged $4.90/mmBtu in January on gains in heating demand. That was more than double the December monthly average of $2.09/mmBtu and 46pc higher than the January 2023 monthly average. Regional gas prices slipped below $2/mmBtu in recent months amid unseasonable warmth and above-average storage inventories. The Northern Border spot index for March so far has averaged $1.38/mmBtu. Weak gas prices across the US have signaled to operators to pause drilling plans . "We're seeing rigs lay down in the natural gas plays, the Marcellus and the Haynesville, like there's no tomorrow," Helms said, referring to shale basins centered in Pennsylvania and Texas-Louisiana, respectively. There were 18,691 oil and gas producing wells across North Dakota in January, according to DMR data, down by 78 wells from the record high set in December. About 88pc of those wells were unconventional in the Bakken-Three Forks formations while the remaining 12pc are from legacy conventional pools, the DMR said. A total of 102 wells were completed in January, up from 80 in December, while more current data shows completions partly edging lower to 92 in February. There were 284 wells waiting to be completed in January, down from 331 the month before. By Brett Holmes and Taylor Zavala Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Green growth a focus for Azerbaijan: Cop 29 president
Green growth a focus for Azerbaijan: Cop 29 president
London, 14 March (Argus) — "Green growth is a priority for Azerbaijan", although the country will continue to deliver gas to customers, president-designate of the UN Cop 29 climate summit Mukhtar Babayev said at the Financial Times Climate Capital Live conference today. Azerbaijan is an oil and gas producer, and a member of the Opec+ alliance. Cop 29 is set to take place in Baku, Azerbaijan, on 11-22 November. "We will continue to deliver the gas to our customers", but at the same time will pursue a "green agenda", Babayev said. Azerbaijan plans to export "over 24bn m³" of gas in 2024, with half of planned deliveries this year earmarked for Europe, energy minister Parviz Shahbazov said earlier this year. Azerbaijan is a "vulnerable country" in terms of climate change, Babayev said, noting water shortages and land degradation. "Azerbaijan has already turned the economy to the green direction", he added. Azerbaijan's state-owned Socar in late December said that it would establish a unit, Socar Green, to focus on driving the country's renewable energy portfolio. The country has a goal to produce 30pc of its power needs from renewable sources by 2030. And Azerbaijan may "reconsider possibly" updating its nationally determined contribution (NDC) — or climate plan — according to Babayev. He emphasised that Cop 29 was a chance for all countries to announce "upgraded NDCs", although the next round of updates under the five-yearly cycle is not due until Cop 30, in 2025. Cop 30 will take place in Brazil. Azerbaijan under its current NDC has set a target to cut greenhouse gas (GHG) emissions by 40pc by 2050, from a baseline year of 1990, contingent to international financial support and technology transfer. Earlier this month, Azerbaijan joined the Global Methane Pledge group of countries that have promised to cut emissions of the greenhouse gas (GHG) by 30pc by 2030. "Climate finance is one of the priorities" for Cop 29, Babayev said. The Cop 29 team has "already started to negotiate with different financial institutes, countries… trying to prepare ourselves to start the negotiations on the text", he added. The topic of climate finance is likely to take centre stage at this year's Cop, as countries must decide on a new finance goal . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Turkey, Iraq officials meet to discuss security, energy
Turkey, Iraq officials meet to discuss security, energy
Dubai, 14 March (Argus) — Senior Turkish officials are visiting the Iraqi capital today for security consultations and discussions over energy co-operation, the Turkish ministry of foreign affairs said. The visit precedes a trip by Turkish president Recep Tayyep Erdogan to Iraq before the end of April. Foreign minister Hakan Fidan, defence minister Yasar Guler, and intelligence chief Ibrahim Kalin will hold talks with Iraqi counterparts, hosted by Iraq's minister of foreign affairs Fuad Hussein. "During the meeting, various topics on our bilateral agenda, particularly co-operation in the fields of combatting terrorism, security as well as military co-operation will be discussed thoroughly," Turkey's foreign ministry said. Relations between Baghdad and Ankara have strained in recent years, specifically as Turkey pursued a more aggressive military strategy against Kurdish separatist group PKK — which Turkey, the US and EU view as a terrorist organisation. "Developing a common understanding in counterterrorism and concrete steps that can be taken in that regard will be on the table," a Turkish foreign ministry spokesperson Oncu Keceli said on 13 March. "The PKK being defined as a common security threat by Iraqi authorities is a sign that the desire to battle the PKK is developing in Iraq and we welcome this." Keceli, whose comments were carried by Turkish state-owned news agency Anadolu, added that there will be talks to develop natural gas resources in Iraq and ship them to international markets. He also noted that the resumption of oil flows from the Iraq-Turkey pipeline would be discussed during the meetings. Separately, Turkey's deputy foreign minister Ahmet Yıldız confirmed Erdogan's visit, which is meant to discuss energy co-operation among other issues, and comes after the one-year anniversary of the halt in around 470,000 b/d of Iraq's crude exports. Erdogan's last visit to Baghdad took place in 2012 when he served as prime minister. The ruling by the Paris-based International Chamber of Commerce in March last year further complicated the situation, because it found Ankara had breached a 1973 agreement with Iraq by allowing crude marketed by the KRG to be exported without Baghdad's consent. Turkey is also holding out on paying $1.47bn that the court said it owed Baghdad in compensation for breaching the pipeline deal. Turkey has said it is ready to resume exports through its Mediterranean port of Ceyhan. But disagreements between Baghdad and Erbil specifically over the contracts of the international oil companies operating in Kurdistan, Iraq, have prevented a restart. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
IEA ups demand growth forecast on bunkers, US petchems
IEA ups demand growth forecast on bunkers, US petchems
London, 14 March (Argus) — The IEA has increased its global oil demand forecast by 110,000 b/d in 2024, citing an improved outlook in the US and higher bunker fuel use. In its latest Oil Market Report (OMR), the Paris-based agency sees global oil demand rising by 1.34mn b/d to 103.18mn b/d this year — a significant slowdown on last year's growth of 2.28mn b/d. The IEA's latest demand growth forecast for this year is the highest since it released its first projection for 2024 last July. At that time, it was guiding for growth of 1.15mn b/d for 2024. Still, the IEA's forecast remains substantially lower than that of Opec, which anticipates an increase of 2.25mn b/d to 104.4mn b/d. The IEA gives two reasons for its upgrade — surging ethane demand for the US petrochemicals sector, and increased bunker fuel demand as ships that would have typically sailed through the Red Sea choose the safer-but-longer route around Africa to avoid the threat posed by Yemen's Houthi militants. Some ships also appear to be ' fast steaming ' to mitigate the impact of longer journeys, which is also adding to demand. "With shipowners bypassing the Red Sea, longer routes around the Cape of Good Hope combined with faster speeds to sharply increase bunkering demand in [Singapore], and to a lesser extent in smaller southern African refuelling ports," the IEA said. On US demand, the IEA said this suggests "the shift towards Chinese production in petrochemical markets could be losing momentum. The most cost-efficient petrochemical producers may now have the wherewithal to better compete with new Chinese plants." It sees Chinese consumption growth of 620,000 b/d in 2024, lower by 80,000 b/d than in the previous OMR. On global oil supply, the IEA sharply revised down its 2024 growth estimate by 920,000 b/d to 800,000 b/d, following the decision by several Opec+ members to extend their latest voluntary supply cuts by three months to the end of June. The IEA's latest supply forecast assumes the Opec+ voluntary cuts remain in place until the end of 2024. This shifts its balance for this year from a surplus of around 800,000 b/d to a deficit of 280,000 b/d. Opec+ has yet to decide on its output policy for the second half of the year and may do so at a ministerial meeting scheduled for 1 June in Vienna. Global observed oil stocks surged by 47.1mn bl in February, reversing a steep draw in January, the IEA said. This was due to a big increase in offshore stocks as seaborne exports "recorded an all-time high" and Red Sea shipping disruptions tied up significant amounts of oil on water, it said. While oil on water rose by 84.8mn bl in February according to preliminary data, on-land stocks fell for a seventh consecutive month, the IEA said. By Aydin Calik Global oil demand/supply balance mn b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.