Libya, Nigeria could cap crude output – expert
Baku, Azerbaijan, July 11
By Leman Zeynalova – Trend:
Nigeria and Libya could join the OPEC deal and cap their crude oil production, Tom Pugh, the economist at British economic research and consulting company Capital Economics, told Trend.
He was commenting on the invitation of Libya and Nigeria to the meeting of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) to be held in St. Petersburg on July 24.
“I don’t think it’s a particularly big deal that they may attend the meeting. They haven’t committed to anything and any agreement is likely to be a cap at around current levels rather than a cut,” said the expert. “I wouldn’t be surprised if they do agree to join the OPEC deal and cap production.”
Pugh believes that capping production would probably give sentiment a boost, which would be positive for prices.
“It would also give the market some certainty. Investors are concerned about growing production. If output in Libya and Nigeria is capped, then this would mean it is only really the US where more production could come from, so it would be beneficial in that sense,” he added.
The expert doubts that either country would be willing to actually cut its production though.
On May 25, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
Follow the author on Twitter: @Lyaman_Zeyn