Venezuela near a tipping point with oil revenues shrinking and debt growing

Fuel Fix:

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There isn’t a huge amount to get excited about today to justify the effervescent rally; Nigeria’s oil ministerhas joined voices from countries such as Oman and Azerbaijan to highlight the need of leading oil producers to cut production to support prices. Much like the response to Oman’s request, it will fall on deaf ears.

Staying on the topic of producers under stress, this chart (left) shows how Venezuela’s revenue from oil continues to evaporate. This is crippling for the Venezuelan economy, as oil accounts for ~96% of its export revenues. Fears are rising that Venezuela may default on its foreign debt burden of $120 billion; should oil remain around $32 a barrel, 90% of its oil revenues from this year will be needed to service debt obligations, including sovereign debt and money owed to China.  (Emphasis added.)

While the break-even for Venezuela’s oil production is some of the more cheaper in the world at ~$17 a barrel, the price of its heavy crude is seen well below the WTI or Brent benchmark at closer to $23. Given the crippling economics involved, credit default swaps are pricing in an 80% likelihood of Venezuela defaulting in the next year.
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The socialist government of Venezuela is running out of other peoples money and their own assets.  They are the dying proof that Bernie Sanders is wrong in his economic theories.