When OPEC reached a deal last year with non-OPEC producers to cut oil output, the decision to exclude Nigeria and Libya from the restrictions was seen as a risk to the group’s efforts to curb a global crude glut, Reuters reports.
An oil price rally has already stumbled since the deal, but Nigeria and Libya are not to blame. Output from both nations has slipped since December and violence in the two African states makes their ambitions to hike production look optimistic. “The success of these cuts, debatable as they may be, will not hinge on Nigeria and Libya,” said ING analyst Hamza Khan. After rallying above $58 a barrel in January, Brent has now slipped to around $51, under pressure from bulging U.S. inventories and rising U.S. shale production.
In Nigeria specifically, militant attacks in the oil-producing Niger Delta have hobbled output, forcing the closure of the Trans Forcados Pipeline for all but a few weeks since February. Maintenance on the Shell-operated Bonga field has also weighed. Nigerian output in March is now expected to be about 1.43 million bpd, down from 1.54 million bpd in December, after February’s brief rise to 1.65 million bpd. Nigeria is chasing a target of 2.2 million bpd, last achieved in 2012, according to Reuters calculations.