Novak: rising oil output of other countries not to affect cuts agreement

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The two countries were exempted from the oil cut deal reached in Austria last November by members of the Organization of the Petroleum Exporting Countries (OPEC). The International Energy Agency (IEA) anticipates that production at the end of 2017 will be 920,000 barrels per day higher than at the end of 2016, and that it will grow another 780,000 barrels per day by the end of next year.

Monthly data compiled by Bloomberg show the two nations added 440,000 bpd of production in May and June as they resolved disruptions at oil fields.

The arrangement is drawing ire from some fellow producers.

Instead, the group will probably ask a technical committee involving the six OPEC and non-OPEC members, which is due to convene before the ministers hold their talks, to meet Nigerian and Libyan representatives to discuss their production plans, he said.

"It's not going to be easy just to say "Maybe we should just bring Nigeria and Libya into the line and it will be fine", Ait-Laoussine said by phone.

Analysts are saying that Nigeria and Libya "may be open to some form of limits if the right financial incentive can be found".

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OPEC, along with Russian Federation and some other major exporters, has agreed to hold production at around 1.8 million barrels per day (bpd) below levels pumped at the end of past year. The latest report from the Census Bureau pegs US exports at 1.02 million bpd in May, up 20,000 barrels per day from April.

United States crude oil futures were yesterday up 0.7 per cent at $44.51 per barrel, while Brent crude futures rose 0.6 per cent to $47 per barrel. September Brent crude LCOU7, +0.41% on London's ICE Futures exchange rose 18 cents, or 0.4%, to $47.06.

Crude contined to rebound mildly in Asia on Tuesday, with the possibility of productiong curbs in Lybia and Nigeria and a shrinking of USA stockpiles lifting markets.

The production cut agreed a year ago was from levels as assessed by the secondary sources. There are also thousands of drilled, but uncompleted, wells which need little further work to begin producing crude.

As per the Goldman Sachs, without a important fall in oil inventories or a decline in US drilling and production, USA crude could drop below $40 per barrel.