It’s hard to visualize Venezuela producing 5 million b/d in the near to medium term. That would mean violating OPEC quotas, and it’s hard to see where the oil would come from.

Oil prices dropped because demand exceeded supply. This lack of supply is now a thing of the past, the world economy has shrunk, and Saudi Arabia and others developed new production capacity. This creates an overhang in supply which is likely to last several years. Therefore it’s likely the price will at best oscillate around $60 to $70 per barrel until 2011 or so. And this price will be set by Saudia Arabia, the only nation with the economic power and the production capacity to dictate to the market.

The price will be low enough to keep marginal producers from increasing production in a meaningful way. And it seems that Venezuela is more of a marginal producer rather than a price setter like Saudi Arabia. Venezuelan oil fields are older, or very difficult to produce. This will make them very cautious as they try to increase production – a cautious approach dictated by the current circumstances is indeed the only way to go. My bet is they will decide to keep production at the same level, and leave it at that.

The solution, it seems, would be for the government to reduce inflation, and create employment via more economic activity created by government investment in infrastructure, the oil industry, and other industries. But to increase economic activity they need cash, and they are very dependent on oil exports. Because oil prices are unlikely to reach the $100+/bbl levels seen in 2008, they may not be able to spend the funds they need to keep the economy growing – maybe it won’t be as bad as the Economist predicts, but economic growth will likely be impossible.

Another solution would be to encourage private investment, but the government seems to be leaning more towards a communist/socialist economy in the long term. Therefore their philosophical tendency will be to avoid using private investors to help them weather this crisis.

Good to see you back. Good piece above.

Saludos

CONATEL is supposedly going to audit them all but CONATEL has been significantly derelict in its duty to bring broadcasters of all types into line with the Ley RESORTE. Chavez has just brought CONATEL back under the wing of Diosdado’s ministry and we may see some more action now.

I filed several complaints with CONATEL about Portuguese broadcasts being used in sports commentaries back in 2005 and 2006 and….nothing happened, even though this was a flagrant breking of the law. One one broadcat they had a British league soccer game in English with Portuguese subtitles!!

Before taking Globo to task the government should review Colombian broadcast laws where evn cable channels are boorught to heel. Cable TV, as it spreads and becomes more affordable to wider swathes of the opulation as living standards improve, is the ideal tool for transculturizing the population with gringo, captalist values which the government is fighting aginst and this junk is beamed stright into our homes.

Free speech is imporant but Venezuelan values, our children’s mental health and combatting lies and disinformation are equally if not more so.

true socialism is absolute worker/community control over everything in the political/economic spheres

do you even know what socialism is?

In all varieties of political systems.

But 2006 can’t be classified as the most solid showing of support…the 7.3m votes preferred Chavez over his opponent…nothing more.

These 6m votes represent a far more rigid base of support. Either an unquestioning loyalty to Chavez….or a recognition that the revolution must proceed at full pace.

You decide.