Libyan crude oil production
A Bloomberg survey estimates that Libya’s crude oil production rose by 240,000 bpd (barrels per day) to 500,000 bpd in September—compared to August. Libya’s National Oil Corporation targets to produce 600,000 bpd by the end of October 2016. Libya produced about 1.6 MMbpd (million barrels of oil per day) of crude in 2011. Militant attacks on the oil infrastructure led to the fall in Libya’s crude oil production.
A Reuters survey estimated that Libya’s crude oil production rose by 90,000 bpd to 350,000 bpd in September 2016—compared to August 2016.
Nigeria’s crude oil production
A Reuters survey estimated that Nigeria produced 1.44 MMbpd of crude oil in September 2016. Nigeria is also expected to increase its crude oil production. The rise in crude oil production from Nigeria, Iran, and Libya will offset the production cut by OPEC as part of its strategy announced in oil producers’ meeting. For more on supply and demand, read IEA Expects Crude Oil Supply to Outstrip Demand until 2017. Iran is trying to increase production by 400,000 bpd from its current production level of 3.6 MMbpd. For more on Iran’s crude oil production, read Part 6 of this series.
As a result, expectations of oversupply will pressure crude oil prices. For more on crude oil prices, read Part 1 of this series. The rollercoaster ride in crude oil prices impacts oil and gas exploration and production companies’ earnings such as Comstock Resources (CRK), Cobalt International Energy (CIE), and Sanchez Energy (SN).
It also impacts ETFs and ETNs such as the DB Crude Oil Double Short ETN (DTO), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the ProShares Ultra Oil & Gas (DIG), the Direxion Daily Energy Bear 3x (ERY), and the United States Brent Oil ETF (BNO).
For more on weekly drivers of crude oil, read Weak US Dollar and OPEC Support US Crude Oil Prices and Analyzing the Energy Calendar for Oil and Gas Traders.
In the next part of the series, we’ll look at the American Petroleum Institute’s crude oil inventories. Let’s start with US crude oil prices during early morning trade on October 4, 2016.