From Venezuela to Russia, Petroleum Producers Keep Pumping

Last year was a difficult one for some energy investors, with quite a bit more volatility than many prefer prevailing throughout. A few especially perspicacious investors might have anticipated petroleum’s initial plunge down to the twenty dollar per barrel level, but few were ready for the recovery that followed. While investors who crave excitement and potential might have the nerves to endure those kinds of movements regularly, most would enjoy a bit more calm and predictability. Those who click this link will see that there are good reasons to believe that the energy markets this year will be more to the liking of many.

Most of the developments that support this perspective are also of kinds that can assessed more easily than those that contributed to the volatility of last year. While some investors might relish guessing how OPEC will adjust its strategies in the months to come, many feel that predictions of these kinds must necessarily be tentative, at best. On the other hand, assessing the broader economic situations and prospects of particular petroleum producing nations tends to be at least a little bit easier to do. With many such issues seeming right now to conspire to hold the price of oil fairly steady, investors who prefer some stability might take heart.

One unexpected development for many last year, for instance, was the descent of Venezuela’s domestic economy into something that could charitably be called chaos. With the world’s most substantial proven petroleum reserves supporting it, that Latin American country has long relied on oil to fund much of its domestic purchasing. Where now-deceased former President Hugo Chavez might have ridden a wave of populist euphoria to power on the back of high oil prices, his successor, Nicolas Maduro, is having a much more difficult time.

Although Venezuela would undoubtedly like OPEC to cut its production quotas to a minimum, that kind of price supporting action does has come to seem extremely unlikely. As a result, Venezuela will almost certainly be forced to continue pumping into the glut that has been keeping oil prices relatively stable since the ups and downs of last year. With many developments of these kinds now producing similar effects of their own, the year to come could be quite a bit less exciting than the last one.