Libya’s Crude Oil Production Fell from a 4-Year High
Libya’s crude oil production
Libya is an OPEC member. According to a Reuters survey, Libya’s crude oil production fell by 130,000 bpd (barrels per day) to 900,000 bpd in August 2017—compared to July 2017. Production fell from a four-year high due to militants attacking Libya’s major oilfields.
Any fall in production in Libya could support crude oil prices. Higher crude oil (USO) (UCO) prices have a positive impact on oil and gas producers like Bill Barrett (BBG), Stone Energy (SGY), Hess (HES), and Bonanza Creek Energy (BCEI).
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The EIA (U.S. Energy Information Administration) estimates that Libya’s crude oil production rose by 155,000 bpd to 1,005,000 bpd in July 2017—compared to the previous month. It was the highest level in four years.
Libya and OPEC’s production cut deal
Libya was exempt from the production cut deal due to political and economic instability. Libya’s crude oil production has risen ~50% since January 2017.
There was an OPEC and non-OPEC monitoring committee meeting on July 24, 2017, in Russia. The meeting participants decided to allow Libya to increase its production as high as 1.25 MMbpd. However, an official declaration on capping hasn’t been announced. Libya can increase its production more than 38% from the levels in August 2017.
Libya’s Sharara oilfield
On September 6, 2017, Libya’s Sharara oilfield resumed its production after the blockade on August 19, 2017. The Sharara oilfield produces 270,000 bpd of crude oil—25% of Libya’s crude oil production.
In the next part, we’ll look at how Saudi Arabia’s crude oil production and exports impact crude oil prices.