Libyan Oil Output Creeps Higher Ahead of OPEC Decision on Cutsby
N. African producer pumps more than 814,000 barrels a day: NOC
Increase adding pressure on producers seeking to clear a glut
Libya is ratcheting up oil output with less than two weeks to go before the world’s biggest exporters decide whether to extend production cuts to clear a supply glut.
The OPEC member with Africa’s largest crude reserves is pumping more than 814,000 barrels a day, thanks partly to rising output from two fields that re-started last month, Jadalla Alaokali, a board member at the National Oil Corp., said Sunday by phone. Libya was producing about 700,000 barrels a day at the end of April, he said at that time. Output from the politically divided country is at its highest since October 2014 when it pumped 850,000 barrels a day, data compiled by Bloomberg show.
The revival in Libyan production coincides with efforts by the Organization of Petroleum Exporting Countries and allied suppliers to curtail output. OPEC ministers plan to meet on May 25 to decide whether to extend cuts in their production beyond June. The recent increase in Libyan output, together with a surge in North American shale production and signs of recovery in Nigeria, may undercut OPEC’s strategy to re-balance the market and prop up prices.
Libya pumped as much as 1.6 million barrels a day before an uprising in 2011, and it was exempted from OPEC’s cuts due to internal strife. It’s targeting production of 1.32 million barrels a day by the end of this year, the NOC said last week in a statement.
Crude from Sharara, Libya’s biggest field, started flowing in late April to the Zawiya refinery following a three-week closure. El Feel, a field also known as Elephant, re-started last month as well, after having been halted since April 2015.
OPEC and other major producers have reached a preliminary agreement to extend limits on output, the state-run Kuwait News Agency reported on Sunday, citing a statement by Oman’s Oil Minister Mohammed Al Rumhy. Oman is a member of a committee monitoring compliance with the cuts.
Al Rumhy’s counterparts from Iraq and Algeria said Thursday in Baghdad that OPEC and its allies support extending the cuts for another six months. The two biggest producers participating in the curbs, OPEC’s Saudi Arabia and non-member Russia, both signaled willingness on May 8 to prolong the deal.