What Happens If The OPEC Deal Expires?

7 Sep 2017   OPEC

While the aftermath of Hurricane Harvey continues to drive headlines in the energy sector, the attention will once again shift back to OPEC as the year wears on and we head into 2018. OPEC had hoped that a nine-month extension of its original six-month production cut deal – 1.2 million barrels per day from OPEC, plus reductions of nearly 0.6 mb/d from non-OPEC countries – would be enough to “rebalance” the market. But with seven months or so left to go on the deal, they are already coming around to the conclusion that it won’t be enough. Part of the reason for the group’s struggles is that the two exempted members – Libya and Nigeria – have added large volumes of new supply this year. Nigeria’s output is up to about 2.2-2.3 mb/d, according to government officials, a figure that includes condensate. Based on that figure, S&P Global Platts […]

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