London- Statements made by Energy Minister Eng. Khalid al-Falih pushed up oil prices on Monday after being under pressure for four weeks due to the rise of US outcome and the recovery of Libya and Nigeria production – exempted from oil outcome cut.
“In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told Asharq Al-Awsat.
Traders in the oil markets interacted with Falih statements during the beginning of Monday’s session – his statements have shown that forecasts of a rise in prices in the fourth quarter of this year took into consideration the increase in shale oil production.
Shale oil outcome in US is expected to rise for the seventh month in a row in July, according to forecasts of US Energy Information Administration (EIA) this week.
Drillers added six oil rigs in the week to June 16, bringing the total count up to 747, the most since April 2015, energy services firm Baker Hughes Inc said on Friday. That compares with 337 rigs in the same week a year ago.
In a related matter, Libya’s oil output has risen by more than 50,000 barrels per day (bpd) to 885,000 bpd after the National Oil Corp (NOC) agreed to reach a settlement to the dispute with Germany’s Wintershall, a Libyan oil source told Reuters on Monday.
In his interview with Asharq Al-Awsat, Falih said that it is not suggested to put pressure on Libya to join the oil output cut agreement although its production has recovered. He also hoped that Libyans retain a healthy level for natural production which they are entitled to.
OPEC members Nigeria and Libya were exempted from the oil output cut agreement due to troubles that limited the production.