Crude oil prices rose modestly Monday but rising drilling activity in
the United States and uncertainty over Libyan and Nigerian production
cuts clouded the future supply outlook.
The two countries have been invited to a joint meeting between OPEC and non-OPEC on July 24 in St Petersburg, Russia.
Crude oil prices rose modestly Monday but rising drilling activity in
the United States and uncertainty over Libyan and Nigerian production
cuts clouded the future supply outlook.
Six ministers from OPEC and non-OPEC
nations, including Kuwait, Venezuela, Algeria, Saudi Arabia, Russia and
Oman, will meet on July 24 in St. Petersburg, Russia, to discuss the
current situation in the oil market.
This group, called the Joint Ministerial Monitoring Committee, could
recommend expanding the pact to the wider group, which holds its next
meeting in November.
The ministerial talks would be preceded
by a meeting of a technical committee involving all OPEC and non-OPEC
members currently participating in the oil output-cutting deal.
As investors weigh the likelihood and potential effectiveness of Libya
and Nigeria capping production, Bloomberg reported that the possibility
of the two countries agreeing to output caps is giving investors more
hope that prices may rise.
The two African producers, which were
exempted from supply cuts because of internal strife but are now
recovering, have been invited to the July 24 meeting to discuss their
production outlook, Kuwait’s Oil Minister Issam Almarzooq said in
Istanbul.
OPEC agreed with some non-OPEC members
to curtail production until March 2018, but the move has failed to
eliminate a global glut of crude oil.
Libya and Nigeria may attend the July 24 joint meeting between OPEC and non-OPEC, according to Russia’s energy minister.
“We have spoken to (OPEC Secretary
General Mohammad) Barkindo and in the next two weeks there will be
conversations with them (Libya and Nigeria) and possibly we will invite
them to the technical summit,” Russian Energy Minister Alexander Novak
told journalists on the sidelines of an industry conference in Istanbul.
Kuwait confirmed last Sunday that Nigeria and Libya had been invited to
the meeting and their production could be capped earlier than November
when OPEC is scheduled to hold formal talks, according to Bloomberg.
However, Nigeria’s Minister of State for
Petroleum Resources, Dr. Ibe Kachikwu, will be unable to attend the
OPEC meeting because of a previous commitment, the Kuwait Oil Minister
Essam al-Marzouq told reporters on Monday.
“We extended the invitation but
unfortunately there is a previous commitment for the Nigerian oil
minister as I heard today,” he told reporters when asked whether Nigeria
will join the committee meeting set for July 24.
Marzouq, who is the chairman of the joint committee, added that Nigeria
would probably be asked to join the technical committee’s meeting, which
comes before the ministerial meeting, to talk about its oil production
plans.
Reuters reported that Libya said yesterday it was ready for talks but
added that its political, economic and humanitarian situation should be
taken into account in talks on caps.
US crude oil futures were yesterday up 0.7 per cent at $44.51 per
barrel, while Brent crude futures rose 0.6 per cent to $47 per barrel.
Brent crude prices are 17 per cent below
their 2017 opening level despite strong compliance by OPEC with the
production-cutting accord.
Deepening output cuts already agreed to by OPEC and partners is not on the agenda for the July 24 meeting, said Almarzouq .
But OPEC’s Secretary-General, Mohammad Barkindo, said in Istanbul that it was premature to talk about that option.
If Libya and Nigeria are able to stabilise their output at current
levels, they will be asked to cap supply as soon as possible, Almarzouq
added.
THISDAY