Name: Drowning in Unwanted Oil, Venezuela Starts Shutting Down Oil Wells | The Motley Fool
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Drowning in Unwanted Oil, Venezuela Starts Shutting Down Oil Wells | The Motley Fool

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By-Mar 26, 2020 at 5:52PMYou’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more.Oil prices are in a deep funk, and with for gasoline and diesel, it doesn't look like the situation for will improve anytime soon.This is very bad news for Venezuela. &nbsp;As our friends at report, futures prices on West Texas Immediate Crude Oil fell another 7.7% today, crashing to about $23 a barrel, and adding to a slump in prices that are now down 63% from early January. Even at these low prices, though -- near the lowest we've seen in five years -- there's little demand for oil in global markets.As a consequence, Venezuela is sitting on an oil stockpile 30.9 million barrels high, "but no one to buy them," says OilPrice. Venezuela is therefore making the logical choice and curtailing production. Only 464,000&nbsp;barrels a day got pumped last week, a 38% reduction from February production rates, and some oilwells are now being closed down entirely.And here's another problem: Venezuela depends on oil sales to provide 98% of its export earnings. The combination of lessened production, weak demand for oil, and low prices even where demand is present, means significantly lower foreign currency earnings for the country's damaged economy -- which will necessarily mean less money to invest in exploration for greater production in the future, or even for maintaining the ability to produce at current rates.On the bright side, this vicious cycle of weak demand begetting weak prices begetting weak production may help to reduce global oil supplies so that prices can recover faster -- enabling other countries, and other oil companies to profit. The bad news, though, is that this may not happen fast enough to save Venezuela's economy.&nbsp;Market-beating stocks from our award-winning analyst team.Stock Advisor Returns374%&nbsp;S&amp;P 500 Returns121%Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/13/2022.Discounted offers are only available to new members. Stock Advisor list price is $199 per year.Cumulative Growth of a $10,000 Investment in Stock AdvisorCalculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.Current

By-Mar 26, 2020 at 5:52PMYou’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more.Oil prices are in a deep funk, and with for gasoline and diesel, it doesn't look like the situation for will improve anytime soon.This is very bad news for Venezuela. &nbsp;As our friends at report, futures prices on West Texas Immediate Crude Oil fell another 7.7% today, crashing to about $23 a barrel, and adding to a...

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Drowning in Unwanted Oil, Venezuela Starts Shutting Down Oil Wells | The Motley Fool

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