Istanbul- OPEC wants an "orderly recovery" in oil production from Libya, Nigeria and Iran and has a flexible output target under its cuts agreement to accommodate more crude from the three member nations, the group's Secretary-General Mohammad Barkindo has said.
"We (OPEC) are fairly in consensus on our position on cuts", he said, adding that OPEC hoped oil prices would stabilize later this month. As of today, USA oil production has risen over 10 percent since mid-2016 to 9.34 million barrels per day (bpd).
While world demand is climbing faster than initially estimated, OPEC's implementation of the supply cutbacks needed to clear the inventory surplus has faltered to its lowest level since the group began in January, the Paris-based agency said.
Nigeria's output had improved in recent months, after the government managed to end militant attacks on oil pipelines in the Niger Delta by opening peace talks with leaders in the restive oil hub. Of later, there have also been increasing cries to impose an output cap on Nigeria and Libya.
Rising production from OPEC is threatening that progress, the IEA warned. Goldman Sachs warned on Tuesday that crude oil could plunge below $40 a barrel "soon" if OPEC fails to take further action. Daily and monthly average prices could vary significantly from this forecast because global economic developments and geopolitical events in the coming months have the potential to push oil prices higher or lower than the current Short-Term Energy Outlook (STEO) price forecast. The build in total US petroleum inventories for the week ending June 2 was the largest for any week since 2008. The IEA also forecast a rise in oil demand this year: it may grow by an average 1.3 million bpd, accelerating from the 900,000 bpd in the first quarter.More news: Construction crane causes concerns for Oakland fire crews
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OPEC members are having trouble keeping their promises.
The EIA report also showed that USA oil production inched higher by 59,000 barrels a day to almost 9.4 million barrels a day. And it was set to increase at around the same pace again next year to 99.4 million bpd.
Also this week, the EIA lowered its 2018 USA output forecast and trimmed its price target for this year and next below $50 barrel.
As early as 2016, Mercuria, one of the biggest energy traders, acquired a crude supply and marketing business that was the key to more than 150 new shale producers all across the US, Bloomberg sources reported. As of 2016, the US average daily export rate was just 520,000 bpd, although in May, the average daily was 1.02 million barrels.
He further said Nigeria, though committed to the deal, would have to get to a predictive level of comfort to voluntarily join in the production cut.