Nigeria and Libya to cut Oil Output
WorldOil – Key OPEC and non-OPEC oil nations will discuss the situation in producers including Libya and Nigeria at a meeting on Monday, Russian Energy Minister Alexander Novak told reporters on Sunday.
Speculation has been swirling in oil markets that the meeting might ask Libya and Nigeria to join a production cutting deal from which they are currently exempt.
Six OPEC and non-OPEC ministers will meet on Monday in St. Petersburg to discuss the market outlook and compliance with output cuts.
Novak also said Russian output had fallen by around 300,000 bpd since October.
The Secretary General of OPEC, Mohammed Barkindo, believes it is too early to discuss ending the exemption from the oil production cut deal that Libya and Nigeria have been benefiting from, boosting their crude oil output in the last few months.
Speaking at the St. Petersburg International Economic Forum, writes IRINA SLAV of Oilprice, Barkindo said that both Nigeria and Libya still have problems to deal with, so an output cap for either is not yet on the table. He added, however, that the extension agreed by OPEC and 11 other producers will help continue moving in the right direction with the market’s return to balance imminent.
Most observers, as well as traders, don’t seem to share the optimism. In May, OPEC’s overall output rose for the first time since the start of 2017 thanks to none other than Libya, which boosted output after its largest oil field, Sharara, started pumping again after a series of disruptions. The country’s daily average spiked to 827,000 bpd last month, the highest in three years.
Nigeria is also bumping up its production rate and the daily average may hit 2.2 million barrels this month, according to the chief executive of a local oil company, Oando. The increase will come as the Forcados terminal—the target of several militant attacks— resumes operation. The first cargo for this year was loaded at Forcados in mid-May.
It’s no wonder, then, that international oil prices have remained subdued and even announcements like the 6.4-million-barrel draw in U.S. oil inventories that the EIA announced yesterday have failed to have any impact. What makes the situation even more