November 27, 2007 / 2:15 AM / 12 years ago

Venezuela's Chavez says oil cheap compared to wine

CARACAS (Reuters) - Hugo Chavez, president of major oil exporter Venezuela, said on Monday that record crude prices are actually cheap — compared with wine.

Chavez, a price hawk in OPEC who governs over some of the largest reserves outside the Middle East, did some mental arithmetic about the price of wine per barrel and concluded it was 20 times as expensive as oil.

“They blame me for these so-called extremely high oil prices. Well, are they going to say (the wine price) is my fault too?” he asked business people at an event to support his plan to scrap term limits on Sunday in a referendum.

“Oil is only $100 (48 pounds)” a barrel, said Chavez, who often draws laughter from backers with his folksy style. “You see how cheap it is?”

Crude has lapped at $100 per barrel this month, drawing pressure from consumer nations — especially the world’s largest economy, the United States — on OPEC nations to increase supply to ease prices.

Chavez opposed such a move at a summit of the oil exporting group this month. Instead, he vowed to keep oil at $100 per barrel for rich nations while discounting barrels for poor countries.

U.S. crude oil futures fell by $1 to $96.70 per barrel in early Asian trade on Tuesday on expectations that OPEC may boost output and after a fall in U.S. shares.

The United States is Venezuela’s biggest oil customer but Chavez, an ally to Cuba, rails against American “imperialism” and calls capitalism an evil.

Chavez subsidizes gasoline at home. But he hiked taxes on alcohol this year, saying Venezuelans’ high consumption of drinks such as whisky was anti-revolutionary.

Reporting by Ana Isabel Martinez; Writing by Saul Hudson

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