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Thursday, 6 October 2016

Saudis Risk More Pain From OPEC Reversal as Oil Rivals Ramp Up - Bloomberg

Saudis Risk More Pain From OPEC Reversal as Oil Rivals Ramp Up - Bloomberg:

"For OPEC’s production deal to work, it was always clear that Saudi Arabia would need to make sacrifices. The world’s largest oil exporter faces the risk the costs will keep getting bigger.
To bring daily output to the top end of the 32.5 million to 33 million-barrel range agreed to by the Organization of Petroleum Exporting Countries, the Saudis would only need to make the typical end-of-summer reductions as local demand tapers off, according to Citigroup Inc. If Nigeria and Libya restore production, the kingdom may need to cut twice as much, Petromatrix GmbH estimates. U.S. shale drillers also stand ready to fill any supply gap.
“At this point, the Saudis have shown willingness to cut by an amount that’s equal to their seasonal swing in production,” Petromatrix Managing Director Olivier Jakob said by phone from Zug, Switzerland. “If Libya and Nigeria are out, it’s relatively easy to live by the commitment they made. If Nigeria and Libya don’t falter, it’s going to be extremely difficult.” "



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