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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Opec oil output rises as cut-exempt Nigeria, Libya pump more

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LONDON/DUBAI: Opec oil output rose in May, the first monthly increase this year, as higher supply from two Opec states exempt from a production-cutting deal, Nigeria and Libya, offset improved compliance with the accord by others.


A drop in output in Angola and Iraq and continued high compliance from Gulf producers Saudi Arabia and Kuwait helped lift Opec’s adherence with the supply cut deal to 95 per cent from 90 per cent in April, according to surveys.


The Organization of the Petroleum Exporting Countries pledged to reduce output by about 1.2 million barrels per day (bpd) for six months from Jan 1 as part of a deal with Russia and other non-members.


Oil prices has gained some ground but an inventory glut and rising supply by outside producers has kept prices below the $60 a barrel that Saudi Arabia wants.


A sustained output rise from Libya and Nigeria poses further challenges.


To provide additional support for prices, the producers decided at a meeting last week to prolong the deal until March 2018.


They discussed whether to include Nigeria in the output cap but decided against for now, Opec delegates said.


Nigeria and Libya were exempted because their output has been curbed by conflict.


However, supplies from both nations staged a partial recovery in May, lifting overall Opec output by 250,000 bpd to 32.22 million bpd.


The biggest increase came from Nigeria, where the Forcados production stream began loading cargoes for export.


The Forcados pipeline had been mostly shut since it was bombed by militants in February 2016.


In Libya, the state oil firm said output had reached 827,000 bpd on Wednesday, around levels last seen in 2014.


But production is still half the 1.60 million bpd Libya pumped before the 2011 civil war. While the exempt nations pumped more, those bound by output targets boosted compliance.


Adherence by Opec with the deal has been higher than in the past, reaching a record according to the International Energy Agency and analysts. — Reuters


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