A check of global oil stocks showed mixed but mostly higher returns Tuesday after Libya and Nigeria caused OPEC crude production to rise in May.
Nigeria and Libya aren’t bound to OPEC oil production cuts designed to boost prices, and that is not good for crude prices.
But markets seem to have taken data released Tuesday showing higher OPEC supply in stride, since the two nations are allowed to pump more than their compatriots in OPEC. OPEC’s report for May (a PDF), shows that output rose by 336,000 barrels per day to 32.14 million, incorporating government and secondary data sources. Libya, Nigeria and Iraq — each with internal conflicts and economies dependent on oil revenue — contributed to the increase. Nigeria and Libya are exempt from production cuts extended for the second half of this year, and each increased oil production by more than 174 million barrels per day last month, making up for most of the increase but offset by reductions in Angola, the United Arab Emirates and Venezuela. (See table).
The U.S. Energy Information Administration releases weekly EIA petroleum data Wednesday morning. The U.S. price of oil slipped 0.2% Tuesday to $45.99 per barrel, and the international Brent price was flat at $48.28. The United States Oil Fund (USO) was up 0.8% in regular trading, and slipped 1% in subsequent trading.
The iShares MSCI Saudi Arabia Capped exchange-traded fund (KSA) was flat, the VanEck Vectors Russia ETF (RSX) was up 0.4%, and the Global X MSCI Nigeria ETF (NGE) was up 1.5%. Among oil producers, ExxonMobil (XOM) was up fractionally but slipped after hours, China’s CNOOC (CEO) was up 1.2% and Brazil’s Petroleo Brasileiro or Petrobras (PBR) was up 0.7%.
See our posts 4 Reactions As OPEC Cuts, Oil Prices Slump Below $50 and OPEC Deflategate: Can Saudi-Russia ‘Bromance’ Boost Oil? Production was slightly higher in Qatar and Saudi Arabia, was flat in Kuwait. Also see our post Welcome Back Qatar, Tillerson Says.
OPEC crude oil production in May rose by 336,000 barrels per day, based on secondary sources of data. The most notable increases by volume were in Libya and Nigeria. (More in OPEC’s report.)