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Markets absorb increase in Libya oil production

November 21, 2020 at 11:55 am

Oil production plant [cdni]

S&P Global Platts quoted traders in the oil market stating that the global market has absorbed the growing and sudden surge of Libyan oil production, contrary to the expectations of energy agencies and experts.

A trader in the oil market confirmed during a recently held conference that the initial indications suggest that the market was able to absorb the output of Libyan oil without recording substantial panic.

Libya has rapidly increased the production of crude oil during the last two months, after the parties to the conflict agreed on a ceasefire, to reach more than one million barrels per day compared to less than 100,000 barrels per day in early September.

READ: Possible changes to OPEC+ pact lead to 6% surge in oil prices

The production recovery came as a surprise, even to Libyan officials, who initially indicated a slower increase to 700,000 barrels per day by next December, before ending up producing over one million barrels.

The surge of Libyan oil production was more rapid than expected, raising concerns among the OPEC+ countries that are cutting production this year to reduce inflated oil stocks. Expectations of more production cuts by OPEC+ for at least three months have led to an increase in oil prices.