Chavez: Low oil prices won't halt revolution

By RACHEL JONES – 1 hour ago

CARACAS, Venezuela (AP) — President Hugo Chavez said Tuesday that he plans to strengthen his socialist revolution in spite of falling oil prices.

He assured participants in a program that provides stipends to poor mothers that social spending will not be restricted next year.

"Oil could fall to zero dollars, and I guarantee you this revolution will not be detained," he said. "Totally the opposite."

Prices for light, sweet crude settled at $38.98 on the New York Mercantile Exchange Tuesday — 73 percent below last summer's record high. Prices for Venezuela's heavy oil basket dropped to an average $32.15 last week, nearly half the $60 average used for next year's budget.

Chavez acknowledged that oil prices are very low, but said critics hoping this signals his downfall will be disappointed: "The end of Chavez?" he asked mockingly. "I am a man of difficult times."

He said Venezuela has enough international reserves and other savings to withstand the world financial crisis.

Oil prices have fallen even as the Organization of Petroleum Exporting Countries — of which Venezuela is a member — announced a historic production cut of 2.2 million barrels per day earlier this month. The oil cartel has made total cuts of 4.2 million barrels per day since September.

Venezuela relies on oil for 94 percent of exports and remains the fourth largest supplier of oil to the U.S., despite plans to diversify markets to allies such as China.

In the first nine months of 2008, exports of oil and oil products to the U.S. fell 12.4 percent compared with the same period the previous year, to an average 1.4 million barrels per day, the U.S. Department of Energy reported this month.