ARCAYA & ASOCIADOS
SUBJECT: The impact of declining oil prices in Venezuela.
SIGNIFICANCE: The dramatic fall in the price of oil puts pressure on both the government and state oil company, PDVSA.
ANALYSIS: OPEC announced production cuts of 1.5 million barrels per day (b/d) on October 23. Despite this, the oil price has failed to rebound, a cut of this magnitude having been widely anticipated and priced in. With the markets focusing on and anticipating falling oil demand arising from financial and economic crises, this cut has not yet stabilised the price.
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