Thursday, 21 February, 2019

OPEC+ Panel to Discuss Oil Output, Including in Libya, Nigeria, Monday - Novak

Last week OPEC said its crude oil production averaged 32.61 million bpd in June OPEC Output Rising in July
Nellie Chapman | 24 July, 2017, 13:12

Speculation has been swirling in oil markets that the meeting might ask Libya and Nigeria to join the production cutting deal from which they are now exempt. The price of oil, which failed to regain its bullish footing despite the OPEC agreement and supply reduction might force other countries to join Ecuador in the coming months if the situation doesn't improve.

Major OPEC and non-OPEC oil producers fulfilled the agreement to reduce production by almost 100 percent over the first half of the year, Russian Energy Minister Alexander Novak said Monday.

Oil slumped into a bear market last month and Brent crude, the worldwide benchmark, is trading at about US$48, a gain of less than US$2 since the cuts were agreed on a year ago.

Oil demand is expected to grow by two million barrels a day in the second half, he said, without specifying if he was comparing that with the same period of 2016 or the first half of this year.

Libya and Nigeria are a big part of the problem.

Brent crude oil futures plunged 1.24 dollar or 2.52 percent to close at USD 48.06 a barrel at NYMEX.

"We believe that once oil output in Libya and Nigeria stabilizes, there will be less uncertainty on the market as to their future moves, which could allow them to also consider participating in market stabilization efforts", Novak said.

"Russia has reduced output by 300,000 barrels a day since October, in line with its agreement to cut production". Libya's output jumped by 127,000 bpd to 852,000 bpd, while Nigerian crude production rose by 96,700 bpd to 1.733 million bpd. After declining by 153,000 barrels in April on a monthly basis, oil production increased sharply in May and in June. Marzouq, whose country heads the joint ministerial committee, said attendees would discuss continuing the production cuts.

The OPEC dialogue with USA shale oil producers, which was launched past year, will continue, said Secretary General of OPEC Mohammed Barkindo in an interview with RBC.

"The re-balancing process may be going on at a slower pace than we earlier projected, but it is on course, and it's bound to accelerate in the second half", Barkindo told reporters in St Petersburg, according to Reuters.