Venezuela on track to drop 500,000 barrels a day in production because of electrical blackouts
...Since much of their electricity comes from hydroelectric dams that are suffering because of a drought there is not much the country can do to stop its decline. Much of their current production goes to China to repay loans which means what they are producing is not creating any new revenue for the country. All those who praised the country's socialism seem strangely silent in the face of this rolling debacle. Those who are talking see this as "bad luck" instead of the inevitable failure of socialism and a command economy.
... The country’s economic instability has crippled some of its crude production. A new report by Barclays says if the rolling power blackouts that took out 120,000 barrels a day of Venezuela’s production in May persist, the country could lose half a million barrels a day by the end of the year.
“It definitely tightens the balance and raises the call on shale oil,” said Michael Cohen, an analyst at Barclays. “During the peak summer months, people will see how much inventory has been drawn down.”
OPEC’s independent sources say Venezuela’s oil production fell 120,000 barrels a day last month amid outages, and Barclays expects the country’s output to drop at least 300,000 barrels a day, ending the year around 2.1 million barrels a day. If production falls by as much as 500,000 barrels a day, its overall output could drop to 1.7 million barrels a day.
Half a million barrels a day is about half the size of the global glut before wildfires in Canada and militant attacks in Nigeria kept some producers from pumping crude.