This is an excerpt from EERE Network News, a weekly electronic newsletter.

February 19, 2003

Venezuelan Oil Crisis Tightens World Oil Supplies

The latest Energy Situation Analysis Report, published by DOE's Energy Information Administration (EIA), paints a picture of tightening world oil supplies, due largely to a reduced output of oil from Venezuela. A general strike in Venezuela has hampered oil production there, although the February production rates are beginning to trend upward. To compensate for the loss of Venezuelan oil, OPEC (the Organization of Petroleum Exporting Countries) increased its production; at this point, EIA estimates that OPEC countries other than Venezuela and Iraq have at most 2.5 million barrels per day in excess oil production capacity that could be brought online to meet an oil supply crisis. Most of that spare capacity is located in Saudi Arabia. Nigeria, which is under a labor strike, is currently producing about 2.2 million barrels per day.

Domestically, U.S. commercial crude oil inventories (excluding the Strategic Petroleum Reserve) are at their lowest level since October 1975. Prices for crude oil, gasoline, and heating oil have been gradually trending upward since the beginning of 2002. See the EIA's Energy Situation Analysis Report.