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OPEC is thinking of putting a ceiling on the crude oil outputs of Libya and Nigeria, as rising production from these two OPEC producers exempt from the cuts is further complicating the cartel’s efforts to draw down oversupply and boost oil prices, The Wall Street Journal reported on Friday, citing OPEC delegates.
“Nigeria is definitely becoming a worry for us,” a delegate to OPEC from a Persian Gulf Arab country told The Journal, while OPEC delegates from a few other nations have expressed similar concerns.
According to a Platts survey from Thursday, Libya and Nigeria are expected to continue to increase oil production in the coming months. The two countries’ combined output is currently some 380,000 bpd above October levels, the month which OPEC used as a benchmark to base its production cuts. Militancy, attacks on oil infrastructure, and port terminals blockades have quieted in both African countries, therefore further increases in production are likely, according to Platts.
Last week, a new militant group in the oil-rich Niger Delta said it was calling off the war it had threatened to start on June 30, and has decided to “give peace a chance”, in what could be a relief for Nigeria, which had started to recover its oil production that was crippled by militant attacks last year.
Nigeria’s crude oil production increased to 1.68 million bpd in May, up by 174,200 bpd over April—the highest level in more than a year—after the restart of Forcados loadings for the first time since October 2016, according to OPEC’s latest Monthly Oil Market Report.
Libya, for its part, is reaching a 1-million-bpd production—the highest in four years—and in line with its target to have that output reached by the end of July.
In May, Libya’s average daily production was 730,000 bpd, as per OPEC secondary sources, up by 178,200 bpd compared to April.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.