Business OPEC To Cap Oil Output From Nigeria, Libya

Tammy Harvey
July 12, 2017

Current oil prices, however, indicate that no one is holding their breath for OPEC to follow through with its "whatever it takes" promise to draw down supply.

U.S. crude production been growing steadily, topping more than 9 million barrels a day in February, according to the U.S. Energy Information Administration.

By the end of this year, USA crude oil exports could reach 1 million barrels a day. It's premature to talk about deepening output cuts, Opec Secretary-General Mohammad Barkindo said in Istanbul.

Nigerian Oil Minister Emmanuel Ibe Kachiwku arrives at an oil-producers' meeting in Doha, Qatar, on Sunday, April 17, 2016.

OPEC is scheduled to publish the assessment of June output based on secondary sources in its monthly oil market report on Wednesday.

West Texas Intermediate crude oil for August delivery traded down about 1% at $43.95 early Tuesday morning.

Since 2010, total exports of USA crude and refined petroleum products have more than doubled, from 2.4 million barrels a day to 5.2 million barrels by the end of 2016.

Separately, Kuwait's Oil Minister Issam Almarzooq said fellow Opec members Libya and Nigeria, who are exempt from the production cuts and have since boosted oil production, may be asked to cap their crude output soon.

If anything has to be addressed, he went on to note, it's the fact that the militancy in Libya and Nigeria has abated, causing the resurgence of production in those two countries, which Wang says is undoing any good coming from the OPEC cutbacks. Producers have reportedly begun to consider asking the two nations to limit their output.

With deeper cuts now not on the agenda, according to OPEC Secretary-General Mohammad Barkindo, the group is exploring other ways the agreement could be adjusted. While OPEC changed course a year ago and curbed output to boost prices, shale was the main beneficiary and resurgent US output has kept crude below $50, Kallanish Energy understands.

Nigeria and Libya have ramped up production since OPEC's meeting in November 2016. The goal of the alliance is to reduce global oil reserves to an average level of five years.

Other reports by Ligue1talk

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