The Oil Drum

Please read that data carefully.  That is "crude oil".  Yes, Venezuela produces about 2.6 or 2.7 MBPD of "crude"  But then it also produces about 600k of of "synthetic" crudes which is what the stuff they make from their extra heavy oil.  When you add that in they come up to their OPEC quota.  If you read the fine print on the bottom it even notes that the synthetic oil isn't included in their numbers.

Dave:

I have to totally disagree.  Why would Venezuela want to produce 10 MDPD?  They would be giving away their oil for free to do that.  And they don't have the capital for that?  This year PDVSA revenues are going to top $70 billion !!!!  They just have better things to do than flood the market and undercut their own prices.  Chavez ran his whole campeign in 1998 on revitalizing OPEC, cutting back on production, and defending prices.  The first thing he did when he became president was fire Luis Guisti who was the very anti-OPEC head of PDVSA and started respecting oil quotas again.  Then he had Ali Rodriguez, his top oil adviser, speakd to the Russian, Norwegians, and Mexicans not to up prodution when OPEC cut it.  In that way they were able to impliment their new prices bands of 22 to 28 (which were HIGHLY conservative in retrospect).  They were so successful Ali Rodriguez was elected the head of OPEC.

Oil has always been a boom and bust industry where produces have feasted and then gone bankrupt. But the demand for it is also very inelastic so if you can cut back supply even a little prices and profits can go way up.   Thats why OPEC even exists in the first place.  And Chavez understands that very well even if some others do not.

Also, on the assasination thing check this out: http://mediamatters.org/items/20...ms/ 200508220006

Someone calling for his head yesterday.  And in case you missed it there was a US backed coup against him in 2002