FX.co ★ Libya boosts oil production

Over the past six months, Libya has tripled its oil output.

OPEC agreed on November 30, 2016 to reduce output by 1.2 million barrels a day to 32.5 million. Since then, Brent crude price rose by 19% above $58 a barrel. On Tuesday, oil prices fell below $54 a barrel for the first time since December.

Libya had an exemption from the production cut as it was faced with a civil war and unrest. However, the country has managed to come to an agreement with rebels and renewed production. This week Libyan oil output reached 708,000 barrels a day, the highest level in three years.

Earlier in January, the country’s oil production fell below 200,000 barrels a day. Previously, Libya produced about 1.6 million barrels a day.

According to experts’ estimates, Libya could increase its production to 900,000 barrels a day in 2017.

In November 2016, its output stood at the level of about 575,00o barrels a day. Such pace of increase offsets Russia’s pledge to cut its output and could make Saudi Arabia start to increase the pace of production cut in order to achieve the targets agreed by the cartel.

A boost in Libya’s oil output could prevent oil price from rising to $60 a barrel, when investors are awaiting bearish signals.