The latest word from the OPEC rumor mill is that pack leader Saudi Arabia is planning more oil export cuts – causing oil prices to jump on Tuesday.
Oil futures jumped up two percent in value after industry consultant Petroleum Policy Intelligence said the KSA had been considering lowering exports by a further 1 million barrels per day.
New production from Libya and Nigeria, two African countries that have been granted an exemption from production quotas due to their previously weak oil output, have brought hundreds of thousands of barrels online in the past few weeks.
Sources close to the Libyan oil sector said the country had reached 1.1 million bpd national output, according to World Oil. The country is set to participate in an OPEC technical meeting on July 22nd to discuss the “factors enabling and constraining Libya’s production recovery,” National Oil Company chairman Mustafa Sanalla said Tuesday.
“We think they are looking at options to speed up the rebalancing,” PPI founder Bill Farren-Price said of the KSA in the new report.
No further oil output cuts are on the agenda for the July meeting either, according to the cartel’s Secretary-General Mohammed Barkindo, who spoke to reporters at an industry conference in Istanbul earlier this month. Current production cuts from within OPEC amount to 1.2 million barrels per day in lower output, but this agreement, which went into effect in January, does not control exports at all.
Saudi Arabia tried cutting exports to the United States last month in order to force Gulf refiners to use up existing crude inventories, but soon after the announcement, Iraq reached a deal with American buyers to sell its own crude as a substitute for lower Saudi supplies.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…