Oil rises above $44 on OPEC cap Oil prices hovered above $44 a barrel as the market weighed the likelihood and potential effectiveness of Libya and Nigeria production capping. Investors’ skepticism over whether Libya and Nigeria will agree to limit supplies kept futures trading in a $1.19-range in New York. Kuwait’s Oil Minister IssamAlmarzooq said in Istanbul that the two African producers, who have boosted output since being exempt from the Organisation of Petroleum Exporting Countries (OPEC) cuts, have been invited to a July 24 meeting in Russia to discuss the stability of their production, BNP Paribas SA reduced its price forecasts for this year and next because supply growth elsewhere is diluting the impact of the OPEC-led curbs. The possibility of Libya and Nigeria agreeing to production caps is giving investors more hope that prices may rise, though the uncertainty is causing “a see-saw effect,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. “People are worried that it could turn out to be a prolonged affair getting them to the table to sign off on something.” Oil has traded below $50 a barrel since May in New York amid concerns that elevated global oil inventories and rising output from the U.S. and other producers will offset cuts by OPEC members and its partners. U.S. shale production can expand with prices in the mid-$40s, according to JPMorgan Chase & Co. Libya and Nigeria together added 440,000 barrels a day of production in May and June as fields restarted, according to data compiled by Bloomberg. West Texas Intermediate for August delivery rose 38 cents to $44.61 a barrel on the New York Mercantile Exchange. Total volume traded was about 15 per cent above the 100-day average. Prices had fallen $1.29, or 2.8 per cent, to $44.23 on Friday. Brent for September settlement increased 40 cents to $47.11 a barrel on the London-based ICE Futures Europe exchange. Prices slid 2.5 per cent last week. The global benchmark crude traded at a premium of $2.31 to September WTI. If Libya and Nigeria are able to stabilise their output at current levels, they will be asked to cap supply as soon as possible, Almarzooq said. However, deepening production cuts already agreed to by OPEC and partners is not on the agenda for the July 24 meeting in St. Petersburg, he said. It’s premature to talk about that option, OPEC Secretary-General Mohammad Barkindo said in Istanbul. “The output from Libya and Nigeria have actually had more of an impact in undermining the efficacy of OPEC’s cuts than even U.S. shale,” Tamar Essner, an energy analyst at Nasdaq Inc. in New York, said by telephone. “If they can put a freeze, that remains to be seen, but that will be an important driver in terms of really reducing OPEC’s exports.” BNP Paribas cut its 2017 Brent forecast by $9 to $51 a barrel and for 2018 by $15 to $48, while making similar reductions for WTI. “OPEC’s objective to reduce oil inventories to their five-year average is elusive in the short-term,” the bank’s head of commodity markets strategy Harry Tchilinguirian said in an emailed report. The post Oil rises above $44 on OPEC cap appeared first on The Nation Nigeria.

Oil prices hovered above $44 a barrel as the market weighed the likelihood and potential effectiveness of Libya and Nigeria production capping.

Investors’ skepticism over whether Libya and Nigeria will agree to limit supplies kept futures trading in a $1.19-range in New York.

Kuwait’s Oil Minister IssamAlmarzooq said in Istanbul that the two African producers, who have boosted output since being exempt from the Organisation of Petroleum Exporting Countries (OPEC) cuts, have been invited to a July 24 meeting in Russia to discuss the stability of their production,  BNP Paribas SA reduced its price forecasts for this year and next because supply growth elsewhere is diluting the impact of the OPEC-led curbs.

The possibility of Libya and Nigeria agreeing to production caps is giving investors more hope that prices may rise, though the uncertainty is causing “a see-saw effect,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone.

“People are worried that it could turn out to be a prolonged affair getting them to the table to sign off on something.”

Oil has traded below $50 a barrel since May in New York amid concerns that elevated global oil inventories and rising output from the U.S. and other producers will offset cuts by OPEC members and its partners. U.S. shale production can expand with prices in the mid-$40s, according to JPMorgan Chase & Co. Libya and Nigeria together added 440,000 barrels a day of production in May and June as fields restarted, according to data compiled by Bloomberg.

West Texas Intermediate for August delivery rose 38 cents to $44.61 a barrel on the New York Mercantile Exchange. Total volume traded was about 15 per cent above the 100-day average.

Prices had fallen $1.29, or 2.8 per cent, to $44.23 on Friday.

Brent for September settlement increased 40 cents to $47.11 a barrel on the London-based ICE Futures Europe exchange. Prices slid 2.5 per cent last week. The global benchmark crude traded at a premium of $2.31 to September WTI.

If Libya and Nigeria are able to stabilise their output at current levels, they will be asked to cap supply as soon as possible, Almarzooq said. However, deepening production cuts already agreed to by OPEC and partners is not on the agenda for the July 24 meeting in St. Petersburg, he said. It’s premature to talk about that option, OPEC Secretary-General Mohammad Barkindo said in Istanbul.

“The output from Libya and Nigeria have actually had more of an impact in undermining the efficacy of OPEC’s cuts than even U.S. shale,” Tamar Essner, an energy analyst at Nasdaq Inc. in New York, said by telephone. “If they can put a freeze, that remains to be seen, but that will be an important driver in terms of really reducing OPEC’s exports.”

BNP Paribas cut its 2017 Brent forecast by $9 to $51 a barrel and for 2018 by $15 to $48, while making similar reductions for WTI. “OPEC’s objective to reduce oil inventories to their five-year average is elusive in the short-term,” the bank’s head of commodity markets strategy Harry Tchilinguirian said in an emailed report.

The post Oil rises above $44 on OPEC cap appeared first on The Nation Nigeria.