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The meeting of Organization of Petroleum Exporting Countries (OPEC)scheduled for December 6 and 7 at Vienna, L & # 39; Austria, will be decisive for the price of oil and so for the public finances of oil-dependent countries as a Ecuador.
The latest decision made by this organization in the middle of this year was to increase crude oil production by one million barrels a day in order to stabilize the market tanker. It was a different strategy than the one approved at the end of 2016, when it was decided to take 1.8 million tons of gross lead to improved prices.
Last June, the average price of oil West Texas Intermediate (WTI), which serves as a reference for Ecuador, amounted to $ 67.70 and peaked at $ 71.70 per barrel in October, according to figures from the National Information System (SNI).
However, since the beginning of this month, the price is down. Yesterday, for example, a barrel of oil WTI closed at $ 50.29 after learning that the oil reserves of States United They rose from 3.6 million barrels – before the forecast – to 450.1 million, according to the EFE agency. Analysts had calculated that the rise would be one million.
This is the tenth consecutive weekly increase attributed to the recent increase in domestic production, which reached a record 11.7 million barrels a day.
The fall was not greater because there was also factors price, for example, the possibility for Saudi Arabia to defend a possible reduction in the joint production of OPEC at the next meeting of the group.
This affected the price of Ecuadorian crude. With the projected data from Service National of Information, local oil would close this month at an average of 56.5 USD, which would make November the worst of the year for local crude (see chart).
The current price of gross WTI is lower than 58.29 USD per barrel levied by the Government of Ecuador in the Pro forma of 2019, which will be badyzed today by the plenary L & # 39; badembly National.
For this reason, the Government support a further reduction in oil production at the next meeting of the OPEC.
Carlos Perez, Minister of Energy and Non-renewable Natural Resources, will go to Vienna December 4th. He stated that, at that meeting, he hoped to support the thesis of the resumption of previous production, namely that of removing 1.8 million barrels of oil per day from the market.
This would, according to the Minister, have a positive impact on the price of WTI and, with that, in the national crude.
The government hopes that the barrel price of oil oscillate between 60 and 70 USD next year. With regard to production, in 2019, it is planned to produce 560,000 barrels a daywhich is 20,000 barrels more than the target set for this year.
The minister Perez even talked about asking, if necessary, for permission to OPEC increase domestic production. However, during this 2018 Ecuador he has not been able to increase his production.
On average, between January and September of this year, 518,000 barrels of crude oil were produced per day; that's about 17,000 barrels a day less than the same months last year, according to figures from Central Bank of Ecuador. Currently, the country is extracting 516 253 barrels, according to yesterday's report from the Hydrocarbons Control Agency (ARCH). This figure is lower than the own quota initially set by the OPEC for the country, which is 522,000 barrels a day.
Falling oil prices, among other factors, had an impact on country risk in Ecuador, which closed Tuesday at 817 points, the highest in the year, according to the report. Bank Central.
This indicator measures a country's ability to meet its debt commitments and, in the case of Ecuador, is directly related to the behavior of the oil market, because of the dependence of the economy with this product.
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