Libya’s crude oil production
The EIA estimates that Libya’s crude oil production rose by 20,000 bpd (barrels per day) or 2.1% to 980,000 bpd in November 2017—compared to the previous month. Production rose by 395,000 bpd or 68% from the same period in 2016. Production was near a four-year high.
Any rise in production from Libya will have a negative impact on crude oil (BNO) (SCO) prices. Moves in oil (UWT) prices impact oil producers (FXN) (IEZ) like Northern Oil & Gas (NOG), Stone Energy (SGY), and Goodrich Petroleum (GDP).
Libya is an OPEC member. The country’s production is near a multiyear high due to the restart of the Sharara oilfield in September 2017. It’s the largest oilfield in Libya. The Sharara oilfield has a capacity of 270,000 bpd, which is close to 25% of Libya’s oil production. The oilfield was closed due to militant attacks in August 2017.
Libya and production cuts
Libya was exempt from ongoing production cuts due to economic problems. The current production cuts were extended until December 2018. Libya’s oil production rose by ~300,000 bpd or 44% between January 2017 and November 2017. Libya plans to increase production in 2018 despite the production cuts.
Libya’s crude oil production hit 1,005,000 bpd in July 2017—the highest level in four years. Its production has risen 400% since August 2016. Libya plans to increase its oil production in 2018. Any increase in Libya’s crude oil production could pressure oil (BNO) (UCO) prices.
Next, we’ll discuss how the global crude oil supply outage impacts oil prices.