What Happens If The OPEC Deal Expires? | OilPrice.com:
"OPEC appears to be nervous that its production cut deal will once again fall short, and the group is already discussing the possibility of yet another extension. While the aftermath of Hurricane Harvey continues to drive headlines in the energy sector, the attention will once again shift back to OPEC as the year wears on and we head into 2018. OPEC had hoped that a nine-month extension of its original six-month production cut deal – 1.2 million barrels per day from OPEC, plus reductions of nearly 0.6 mb/d from non-OPEC countries – would be enough to “rebalance” the market. But with seven months or so left to go on the deal, they are already coming around to the conclusion that it won’t be enough. Part of the reason for the group’s struggles is that the two exempted members – Libya and Nigeria – have added large volumes of new supply this year. Nigeria’s output is up to about 2.2-2.3 mb/d, according to government officials, a figure that includes condensate. Based on that figure, S&P Global Platts says Nigeria’s crude output probably stands at about 1.8 mb/d, which comports with OPEC’s latest estimate. In other words, Nigeria is now producing about 400,000 bpd more than it was a year ago on the eve of the original OPEC agreement."
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