16 July 2017, Sweetcrude, Lagos —Crude oil output from Nigeria and Libya increased by an average of between 300,000-500,000 barrels per day since the cap deal began.
According to data compiled by Sweetcrude Reports, the output from the two countries combined was about 500,000 barrels per day since January 2017, not enough for the countries to be asked to cap so soon.
Data obtained showed that the increase in outputs was just in June.
In support of Nigeria and Libya not capping any time soonest, OPEC member, Kuwait said on Friday it would be premature to cap oil production from both countries as their outputs needed to stabilise further.
OPEC would be reducing output by 1.2 million barrels per day (bpd) until March 2018, while Russia and other non-OPEC producers are cutting half as much.
However, oil prices fell more than 15 percent this year due to increased supplies and high global stocks, which remain above OPEC targets despite the cut agreement.
OPEC and non- OPEC’s ministerial meeting will take place in Russia on July 24 to discuss compliance with the cuts, from which Nigeria and Libya were exempt, Kuwait’s OPEC governor Haitham Al-Ghais told Reuters on Friday.
“All this talk about putting a production cap on Libya and Nigeria is premature,” Al-Ghais said.
He said representatives from Libya and Nigeria had been invited to a technical OPEC/non-OPEC committee meeting on July 22 ahead of the ministerial gathering, to give presentations on production from both countries.
“We have to look at the sustainability and stability of production from those countries,” said Al-Ghais, who also heads the technical committee. “We need to wait and see more production data before we can make any decision.”
The technical committee could make recommendations on Nigeria and Libya, which the ministerial committee would then review. The latter cannot take production decisions but can make recommendations to OPEC and other participating producers, which are scheduled to meet formally in November, he said.
Al-Ghais said that despite production increases from Libya and Nigeria, there were signs of market rebalancing including U.S. government data showing a large drop in stockpiles.
“We feel that the market is on the right way of correcting itself,” he said. “Demand will pick up and we expect to see stronger demand in the third quarter.”