Libya’s crude oil production
Libya is one of OPEC’s members. The EIA estimated that the country’s crude oil production rose by 35,000 bpd (barrels per day) or 3.8% to 960,000 bpd in October 2017—compared to the previous month. Production rose by 410,000 bpd or 75% from the same period in 2016. Libya’s crude oil production was near a four-year high. High production is bearish for oil (BNO) (USO) (UCO) prices. Lower oil prices have a negative impact on oil producers’ (IYE) (IXC) earnings like Sanchez Energy (SN), Hess (HES), Denbury Resources (DNR), and Anadarko Petroleum (APC).
Production rose due to the restart of the Sharara oilfield in September 2017. It’s the largest oilfield in Libya with a capacity of 270,000 bpd. It’s equal to 25% of Libya’s crude oil production. It was shut down due to militant attacks on August 19, 2017. The oilfield has been operational in November 2017, which could increase production.
Libya had been exempt from the ongoing production cuts due to economic issues. On November 24, 2017, Libya’s foreign minister said that the country would cooperate with the current production cut extension.
Libya’s crude oil production has risen by ~282,000 bpd or 42% since January 2017. National Oil Corporation of Libya, which is a state-owned oil producer, plans to increase its production. It plans to pump 1.25 million barrels per day of crude oil by the end of 2017. Any increase in Libya’s crude oil production could pressure oil (BNO) (DBO) prices. However, militant attacks could cause a supply disruption, which is bullish for oil prices.
Next, we’ll discuss how long OPEC could extend the production cuts.