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Venezuela chaos: The biggest threat to cheap oil

Venezuelans cross into Colombia to get food

Venezuela's deepening chaos could soon create tremors in the global oil markets.

Already in an economic and humanitarian crisis, Venezuela's oil production -- the country's sole lifeline for revenue -- has hit a 13-year low.

As the situation worsens, Venezuela's oil output could plunge even lower. A new report by Columbia University's Center on Global Energy Policy calls Venezuela a "growing supply risk for oil markets in 2017."

Oil prices are currently around $45 a barrel, a dramatic drop from about $110 two years ago. The main reason for the low prices is that there's too much supply globally. However, the line between oversupply and a shortage in the oil market is thin, and Venezuela could tip the scale in the opposite direction.

Venezuela is the biggest "wildcard out there," said Matt Smith, director of commodity research at ClipperData. "The economy there is spiraling out of control. The fear is that oil production could be the next shoe to drop."

While the rest of OPEC is ramping up...


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