A proposal that Nigeria and Libya could have to accept limits on their crude production probably wouldn’t be enough to put OPEC’s faltering efforts to eliminate a global supply glut back on track, Bloomberg reports.
The two African nations, exempt from the supply curbs agreed last year due to internal strife, have added enough production in the last two months to offset Saudi Arabia’s cut. Should the pair accept a cap at their desired levels of output, OPEC and allies including Russia would still have to adjust their own quotas to compensate for the increase, experts have said.
Several nations from the Organization of Petroleum Exporting Countries plus non-members Russia and Oman will meet in St. Petersburg on July 24 to check up on the success of their agreement to curb output, reduce swollen global inventories and boost oil prices. They have also invited Libya and Nigeria to the meeting in Russia to discuss the stability of their production.
International crude benchmark Brent, which has lost about 18 percent this year, fell 0.6 percent to $46.59 a barrel at 10:41 a.m. London time on Tuesday. The “rather muted” price reaction to potential production ceilings for Libya and Nigeria “highlights that there is probably little conviction out there that such a cap would actually end up being lower than current production levels,” JBC Energy GmbH noted.