Apparently not every OPEC member state has a limit on how much oil they’re allowed to produce. And those very members capitalized on the opportunity yesterday causing crude production to rise to its highest levels this year.
According to Bloomberg, crude oil saw a 260,000 increase from the previous month (May). Approximately half of the increase came from Libya and Nigeria, two countries who enjoyed an exemption from the limitations imposed on the other member states according to the agreement with OPEC and their allies.
Back in January, OPEC slashed crude production in response to an oversupply of oil which resulted in a lower price per barrel. This agreement received an extension with the blessing of their ally, Russia. According to the deal, an extension was granted until March 2018 as the oil market hasn’t succeeded in achieving the equilibrium that they hoped for.
However, this re-balancing act might not progress as smoothly as expected if Libya and Nigeria keep pumping oil like its going out of style. Libya is currently outputting at a four-year-high. Meanwhile, OPEC’s largest producer, Saudi Arabia, increased their daily June production by 90,000 barrels. Angola and the UAE also increased production by 40,000 respectively.
Will this winning streak continue or will OPEC find a way to correct the oversupply?
Either way, the iFOREX online platform allows you to trade on a wide range of commodities including oil.
Found this article interesting?
Want to see how quickly you can take your first steps in the world of online trading?
iFOREX has one of the most popular training packages.