Venezuela Supports OPEC Production Cut

CARACAS, Venezuela – Venezuela will recommend cutting oil production at an upcoming OPEC meeting on June 1, Venezuela’s oil minister said Monday.

“We maintain that given the level of supply in the market, a production cut is in order,” Energy Minister Rafael Ramirez told reporters.

Ramirez said oil prices were being pushed up by geopolitical tensions, such as the standoff over Iran’s nuclear program and violence in Nigeria, but that there were sufficient volumes of oil on the market to justify a production cut.

Venezuela – the world’s fifth largest oil exporter – is hosting an upcoming meeting of the Organization of Petroleum Exporting Countries in Caracas.

Venezuela is traditionally a leading voice within OPEC for limiting output as a means of boosting oil prices.

Ramirez added that OPEC countries were already discussing the possibility of pricing oil in euros instead of dollars and said the issue merited further consideration at the upcoming meeting.

Earlier this month, Iran granted a license for its first euro-denominated oil market, and President Hugo Chavez said shortly afterward that Venezuela may consider doing something similar.

Commodities experts have said that if the market were to succeed – or if Iran simply demanded payment for its oil in euros – it could cause a decline in the dollar’s value as central bankers around the world convert some dollar reserves into euros.

Oil is currently denominated in dollars around the globe, whether through direct sales between producers and consumers or in trades made on markets in New York and London.