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Large Crude Build Forces Oil Prices Lower

Large Crude Build Forces Oil Prices Lower

Oil prices slipped on Wednesday…

Sharara Output Jump Puts Libyan Output At Peak Since October 2014

Oil

An anonymous source told Bloomberg on Wednesday that the giant field now boasts a 250,000 barrel-per-day extraction rate – 25,000 barrels higher than the last official output data reported. National production now stands at 827,000 barrels per day, according to Mustafa Sanalla, chairman of the National Oil Corporation (NOC).

Libya is a member of the Organization of Petroleum Exporting Countries (OPEC), an oil industry bloc that exempted Tripoli from a crude supply calibration deal in November that would have limited national output. Last week, OPEC decided to extend Libya’s exemption from the agreement for nine more months, even as the country’s oil activities continued their climb, reversing the intended effects of the bloc’s efforts.

The current production rate is still far from the 1.6 million barrels the North African producer boasted before the 2011 civil war, but significantly higher than what it produced last year. For this year, the NOC plans to bring the total up to 1.32 million bpd, up from an earlier target of 1.1 million bpd.

OPEC-member Nigeria and non-OPEC producer United States are both increasing output as well, further flooding markets. Lagos had been dealing with attacks by groups like the Niger Delta Avengers (NDA) and other affiliates, but the incidents have slowed in recent months, allowing the Forcados pipeline to be repaired and oil output to recover. Shale producers in the U.S. are taking advantage of marginally higher prices to bring dozens of oil rigs in the Permian Basin online, despite warnings from senior Saudi officials who are desperate to see higher barrel prices before the Aramco IPO next year.

By Zainab Calcuttawala for Oilprice.com

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