Amid the most enduring global oil glut in decades, two OPEC crude producers whose supplies have been crushed by domestic conflicts are preparing to add hundreds of thousands of barrels to world markets within weeks.
Libya’s state oil company on Wednesday lifted curbs on crude sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially unlocking 300,000 barrels a day of supply. In Nigeria, Exxon Mobil Corp. was said to be ready to resume shipments of Qua Iboe crude, the country’s biggest export grade, which averaged about 340,000 barrels a day in shipments last year, according to Bloomberg estimates. On top of that, a second Nigerian grade operated by Royal Dutch Shell Plc is scheduled to restart about 200,000 barrels a day of flow within days.
While there are reasons to be cautious about whether the barrels will actually flow as anticipated, a resumption of those supplies – more than 800,000 barrels a day in all – could more than triple the global surplus that has kept prices at less than half their levels in 2014. It would also come just as members of the Organization of Petroleum Exporting Countries and Russia are set to meet in Algiers later this month to discuss a possible output freeze to steady world oil markets.
‘If you have some restart of Nigeria and some restart of Libya, then the rebalancing gets pushed even further out,’ Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by phone. ‘It complicates matters a lot before the meeting in Algeria.’
This post was published at David Stockmans Contra Corner By Laura Hurst, Elisha Bala-Gbogbo and Angelina Rascouet, Bloomberg Business ‘ September 15, 2016.