OPEC and non-OPEC meeting
There will be an OPEC and non-OPEC monitoring committee meeting on July 24, 2017, in Russia. Nigeria and Libya are expected to attend the meeting. Nigeria and Libya were exempt from the production cut deal at OPEC’s meeting on May 25, 2017, due to internal political unrest.
Nigeria and Libya have ramped up production since OPEC’s meeting in November 2016. The rise crude oil production has pressured oil prices. US crude oil (SCO) (BNO) (IEZ) prices have fallen 21.7% year-to-date, which motivated major oil producers to cap their production.
Nigeria and Libya’s crude oil production
Market surveys estimate that Nigeria’s crude oil production rose to 1.8 MMbpd in June 2017. Nigeria’s crude oil production was at 1.2 MMbpd in August 2016. A massive rise in production from Libya and Nigeria could offset the production cut deal.
Market surveys estimate that Libya’s crude oil production rose by more than 1 MMbpd (million barrels per day) in June 2017—the highest level in four years. Libya’s crude oil production was at 550,000 in October 2016.
Libya’s action plan
On July 9, 2017, Kuwait said that Nigeria and Libya’s crude oil production could be capped by November 2017. On July 10, 2017, Libya stated that it would attend the meeting on July 24, 2017. However, OPEC and non-OPEC producers should consider Libya’s political and economic situation before capping production.
Any cap in production for Nigeria and Libya could support crude oil prices. It would also help the production cut deal remove excess oil from the market.
In the next part of this series, we’ll see how OPEC member’s crude oil production could impact crude oil prices.