OPEC Won't Prevent Nigeria, Libya From Increasing Oil Output

OPEC Won't Prevent Nigeria, Libya From Increasing Oil Output

Brent crude dropped by $1.35 from Friday's closing price of $49.54 ahead of OPEC's meeting with delegates from Nigeria and Libya to discuss the possibility of future oil production cuts.

The monitoring committee, known as JMMC and which met in the Russian city of St Petersburg, did not give the time-frame for when this would happen, saying it would track Nigerian production patterns in the next weeks.

In May, OPEC and some non-OPEC producers, such as Russian Federation, extended an agreement to slash 1.8 million barrels per day in supply until March 2018.

Nigeria and Libya have been asked to keep their current oil output levels, and they remain exempted from current cut-back agreement among Organisation of Petroleum Exporting Countries and non-OPEC producers.

The oil ministers gathering in St. Petersburg, Russia, made no major changes to their wider supply agreement, stopping short of capping output of Libya and Nigeria.

Beyond high U.S. output, oil prices have also been pressured by production increases in OPEC members Libya and Nigeria, which have exemptions from the cuts due to political instability.

FSMNews

This is given increased oil production in the Niger Delta following peace talks in the area that has caused violent attacks on oil facilities to cease. That represents a cut of 1M from last years exports.

Oil ministers overseeing the effectiveness of a multi-country deal to curb output and lift world oil prices yesterday urged further moves by the group to strengthen that deal and extend it beyond it beyond the first quarter of 2018.

WTI posted a almost 1.7% decline last week, while Brent lost about 1.8%, as sentiment soured amid indications that supply from OPEC was set to rise, despite the cartel's agreement to curb production.

"OPEC secretary-general Mohammad Barkindo said that the oil market is gradually rebalancing but more slowly than expected".

Oil slumped into a bear market last month and benchmark Brent crude is trading at about $48/bbl, a gain of less than $2 since the cuts were agreed on a year ago. US benchmark West Texas Intermediate traded at $45.89, up 0.26%, though still well below last week's high of $47.12.

"If he actually withdraws the U.S from the climate accord, this would signal his intention to further roll-back emission regulations that would favour the use and demand of fossil fuels, thus giving a much needed boost to oil prices", said Jonathan Chan, investment analyst at Phillip Futures in Singapore.

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He also said that the skits that showed him being antagonistic toward the press weren't "funny". I'm in bed, get up, go to church the next day, and look ahead", he said.

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