Venezuelan President Hugo Chavez says that oil prices, which have dropped by half in the last few months, will probably keep falling. Chavez is a price hawk in OPEC and has over the last few weeks been lowering what he considers the likely range for world oil prices, which have plunged due to fears that recessions around the world will slash demand. Chavez said Venezuela will likely be hit by the global turmoil but would not collapse because of the drop in income. Oil accounts for about half of government revenue. "The price of oil is falling? Yes. The price will carry on falling? Probably. But Venezuela will not drown," he said at a forum about the benefits of socialism.
World oil prices are at a 13-month low below $73 a barrel, down from a record of about $150 a barrel in July.
Venezuela, one of the United States' biggest oil suppliers, has drafted a budget for next year based on a prediction of $55-60 a barrel for its basket of low-quality crudes, officials said earlier Wednesday. The South American nation's tarry crude usually trades at about $10 a barrel below US oil.