Opec 'won't discuss' further oil production cuts in July, says Secretary General

Randall Padilla
July 12, 2017

A group of oil - producing countries monitoring the deal will meet on July 24 in Russian Federation, when they could recommend adjusting the pact.

Separately, Kuwait's Oil Minister Issam Almarzooq said fellow Opec members Libya and Nigeria, who are exempt from the production cuts and have since boosted oil production, may be asked to cap their crude output soon.

Without further cuts by OPEC and other producers, Goldman said crude prices could fall below $40 per barrel.

"Capping Libya and Nigeria might help but won't cut the supply by much", he added.

Brent crude futures, the worldwide benchmark for oil prices, were at $46.80 per barrel, up 9 cents, or 0.2 percent, from their last close.

When oil prices finally rose in January, so did cheap shale oil output in the United States, as US producers viewed slightly higher fuel prices, even at the cost of a full market recovery, as an opportunity to bring new rigs online in the Permian and Bakken formations. The rise crude oil production has pressured oil prices. Average daily volume is presently up about 650,000 barrels this year, with OPEC data putting the combined daily production for Libya and Nigeria in May at 2.4 million barrels (June's report is due Wednesday).

Should they reach their daily output goals of 1.25 million and 1.8 million bbl, respectively, overall OPEC production by year-end may be close to 33 million, he estimates. Earlier statements from Libyan and Nigerian oil officials suggest this may not be the case, although there is always the possibility of better oil revenues from higher prices at current production levels. However, OPEC and non-OPEC producers should consider Libya's political and economic situation before capping production.

West Texas Intermediate for August delivery rose 8 cents to US$44.48 a barrel at 9.58am on the New York Mercantile Exchange.

Crude has declined 18% this year amid concerns that rising world supply will outweigh production cuts from OPEC.

With deeper cuts now not on the agenda, according to OPEC Secretary-General Mohammad Barkindo, the group is exploring other ways the agreement could be adjusted.

Other reports by AllAboutTopnews

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