One of the persistent worries for crude bulls of late has been the output from Libya and Nigeria.
You’ll recall that in their May report, OPEC cited production increases from those two members as the proximate cause for output rising the most since November (a hilarious development considering that what it effectively meant was that OPEC production climbed the most since the production cuts during the very same month OPEC met to extend those very same cuts).
Of course Libya and Nigeria were exempted, but it’s become readily apparent that that may soon change.
“OPEC is considering putting a limit on how much oil members Nigeria and Libya can pump, cartel delegates say, as surging production from those countries is complicating the cartel’s plans to influence crude prices,” WSJ reported on Friday, noting that “Libya’s crude-oil output has surged to over 1 million barrels a day, up from 400,000 in October, while Nigeria’s output has reached 1.6 million barrels a day, up 200,000 barrels a day since October.”
Well on Sunday, we got the following notable headlines:
- KUWAIT: OPEC, NON-OPEC INVITED LIBYA, NIGERIA TO MEET IN RUSSIA
- KUWAIT: OPEC, NON-OPEC TO DISCUSS OUTPUT CAPS ON LIBYA, NIGERIA
- KUWAIT: LIBYA, NIGERIA MAY BE ASKED TO CAP OUTPUT SOON
So this isn’t “new” per se, but to the extent the market believes it, it could set the tone for crude in the week ahead.
Or not, because we also got these headlines this afternoon:
- KUWAIT: TOO EARLY TO DISCUSS DEEPER OUTPUT CUTS FOR PRODUCERS
- OPEC CHIEF: OPEC, NON-OPEC COMPLIANCE WITH CUTS HIGHER THAN MAY
- OPEC CHIEF: PREMATURE TO DISCUSS DEEPER OIL OUTPUT CUTS
Draw your own conclusions…