Oil edges up on Saudi pledge to make real supply cuts

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Oil edges up on Saudi pledge to make real supply cuts
Released:  13/06/20172017-06-13
Word count:  375

Oil prices edged up early on Tuesday, lifted by statements that OPEC-leader Saudi Arabia was making significant supply cuts to customers, although rising U.S. output meant that markets remain well supplied.

Reuters
Brent crude futures LCOc1 were at $48.42 per barrel at 0044 GMT, up 13 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $46.21 per barrel, also up 13 cents, or 0.3 percent.

Saudi Arabia, the world's top oil exporter, is leading an effort by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) until the end of the first quarter of 2018 in order to prop up prices. Other countries, including top producer Russia, are also participating.

During the first half of the year, there were doubts over OPEC's compliance with its own pledges, as supplies, especially to Asia, remained high. Saudi officials now say they are making real cuts, including 300,000 bpd to Asia for July, although several Asian refiners said they were still receiving their full allocations.

"Crude oil prices rose on the back of further supportive talk from Saudi Arabia. Energy Minister Khalid Al-Falih said that inventories are declining and reductions will accelerate in the next three week," ANZ bank said.

Although other OPEC members, like Libya and Nigeria, are exempt from the cuts, and there have been doubts over the compliance of others, including Iraq, the club's supplies have been falling since the cut's start in January.

Trade data shows that OPEC shipments to customers averaged around 26 million bpd in the last six months of 2016, while they are set to average around 25.3 million bpd in the first half of this year.

Threatening to undermine OPEC's efforts to tighten the market is a relentless rise in U.S. drilling activity RIG-OL-USA-BHI, which has driven up U.S. output C-OUT-T-EIA by more than 10 percent since mid-2016, to over 9.3 million bpd.

The U.S. Energy Information Administration (EIA) says production will rise above 10 million bpd by next year, challenging top exporter Saudi Arabia.

Overall, oil markets remain well supplied.

A sign of ample supplies is the Brent forward curve <0#LCO:>, which is in a shape known as contango, in which crude for delivery in half a year's time is around $1.50 per barrel more expensive than that for immediate dispatch, making it profitable to charter tankers and store fuel instead of selling it for direct use.

(Reporting by Henning Gloystein; Editing by Richard Pullin)
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Business News
Released:  23/06/20172017-06-23
Word count:  295

Libya is pumping the most oil in four years after a deal with Wintershall AG enabled at least two fields to resume production, adding to the challenge that OPEC and allied producers face in trying to pare global crude inventories.

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Bloomberg
The North African country is currently producing 902,000 barrels a day, an official at the state National Oil Corp. said Tuesday, asking not to be identified for lack of authority to speak to media. Output has risen on the resumption of fields developed with Wintershall and from a boost at Sharara, Libya’s biggest deposit, which is pumping 270,000 barrels a day, another person familiar with the situation said Monday.

The politically divided country is pumping at its highest level since June 2013, when production reached 1.13 million barrels a day, data compiled by Bloomberg show. The increase adds to the challenge that the Organization of Petroleum Exporting Countries and other major producers face after agreeing in May to extend their output-cuts deal to counter a supply glut and slippage in prices.

Libya, like Nigeria, is exempted from the cuts deal.

The NOC and Germany-based Wintershall agreed last week to restart production in some areas, allowing for crude to flow again from the Agkhara deposit, the NOC said in a June 15 statement. Libya’s Sarah oil field also resumed output last week as a result of the deal, another person familiar with the situation said at the time. An earlier dispute with Wintershall had halted 160,000 barrels a day in output, the NOC said on May 31 in a statement.

Libya produced about 700,000 barrels a day at the end of April, Jadalla Alaokali, an NOC board member, said at the time. The country plans to pump 1 million barrels a day by the end of July, the company’s chairman, Mustafa Sanalla, said last week.

Libya is restoring output and exports after descending into lawlessness following a 2011 revolt against former leader Moammar Al Qaddafi. The country, with Africa’s largest crude reserves, was pumping about 1.6 million barrels a day before the uprising.

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Released:  23/06/20172017-06-23
Word count:  160

Ocean Installer has been awarded a subsea, umbilicals, risers and flowlines project on the Al Jurf oil field in the Mediterranean. The client is Mabruk Oil Operations, a joint venture between Total E&P and the national oil corporation of Libya.

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Osjonline
The work scope encompasses the replacement of a 10in flexible flowline between a fixed drilling and production platform and the Farwha floating, production, storage and offloading unit.

“We are very happy with this award and the opportunity to continue to develop our solid working relationship with Total E&P, or as in this case a Total E&P joint venture, further. The award also strengthens our foothold in the Mediterranean, proving our strategy of continued geographical expansion is successful,” said Steinar Riise, chief executive of Ocean Installer.

The project will be managed from Ocean Installer’s Stavanger and Aberdeen offices in co-operation with Mabruk Oil Operations. Onshore engineering will commence with immediate effect. Mobilisation and offshore operations are scheduled for the third and fourth quarters of 2017 using the vessel Normand Vision.

The Al Jurf oil field came on stream in 2003 and is located about 150km northwest off the coast of Tripoli, Libya, in a water depth of approximately 80-90m.
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Oil & Gas News
Released:  23/06/20172017-06-23
Word count:  202

Oil edged up on Friday, recovering slightly from steep falls earlier in the week, but is set for the worst performing first-half in two decades despite ongoing production cuts.

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Reuters
Brent crude futures were at $45.31 per barrel at 0222 GMT, up 9 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 10 cents, or 0.2 percent, at $42.84 per barrel.

Oil prices have fallen about 20 percent this year despite an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by 1.8 million barrels per day (bpd) that has been in place since January.

That's the worst first-half performance for crude oil since 1997, when rising output and the Asian financial crisis led to sharp price falls.

The weak markets are a result of doubts over OPEC's ability to rein in a fuel supply overhang that has dogged markets since 2014 as production has largely outpaced consumption.

"Markets remain sceptical of OPEC's ability to balance supplies," ANZ bank said on Friday.

At the heart of the glut is that rising production levels from the traditional suppliers of OPEC and Russia have been met by soaring output from the United States.

Thanks largely to shale drillers, U.S. oil production has risen by more than 10 percent over the last year to 9.35 million bpd, close to levels of top exporter Saudi Arabia.

(Reporting by Henning Gloystein; Editing by Richard Pullin)
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Released:  22/06/20172017-06-22
Word count:  111

The first regular flight ferrying Arabian Gulf Oil Company (AGOCO)workers from Benina airport to the Messla oil field took off today, as Benghazi’s repaired and re-equipped airport cranks up its services.

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Libya herald
Until now Benina has mainly seen the departure of Umrah flights to Saudi Arabia.

AGOCO’s chairman Mohamed Ben Shatwan went to Benina with some of his managers to see off the Boeing 737. This is the first time in three years that the company has been able to use the airport.

Earlier this month AGOCO announced it was returning to Benina for personnel movements. Today the company said it would be running three regular flights a week.

The Civil Aviation Authority has yet to sign off on the resumption of scheduled passenger flights but Benina is already handling air ambulance, VIP and cargo movements, which include the delivery of humanitarian aid.  
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Released:  21/06/20172017-06-21
Word count:  196

The National Oil Corporation (NOC) has announced production has passed 900,000 barrels a day. The state oil company looks set to meet million barrels a day target by the end of August set by its chairman Mustafa Sanalla.

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Libya herald
The boost to NOC’s output has been underpinned by the temporary deal it made with German company Wintershall, which brought 160,000 bpd back into production. Though the row over changes to the Kassel-based BASF subsidiary’s favourable production sharing contracts continues, Sanalla persuaded the Germans to accept a temporary deal under which they will cover their costs.

Sanalla meanwhile is continuing his campaign to woo back foreign oilcos. He has just seen Fadel Hareeb the local chief of Norway’s Statoil which has a minority stake in the Sharara field. NOC said they talked about boosting production. However, it is clear that Sanalla is concerned not simply with the operational challenges of raising output but also with ensuring that the local communities associated with the field believe they have a vested interest in allowing production to continue uninterrupted.

The NOC chief is continuing his personal engagement which for instance in April saw him broker agreement with local elders to protect the reopened Sharara and El-Fil fields from further blockades. In recent days Sanalla has flown to at least five different oil fields to check for himself the state of the infrastructure and the relations with locals.  
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Released:  21/06/20172017-06-21
Word count:  365

Oil prices dipped on Wednesday, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.

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Reuters
Global benchmark Brent LCOc1 was down 11 cents, or 0.2 percent, at $45.91 barrel at 0345 GMT after falling nearly 2 percent in the previous session to its lowest settlement since November.

U.S. crude futures CLc1 for August were trading down 8 cents, or 0.2 percent, at $43.43, after a more than 2 percent decline to the lowest since September on Tuesday.

Compliance with an agreement by the Organization of the Petroleum Exporting Countries and other producers to cut output by 1.8 million barrels per day (bpd) for six months from January reached its highest in May since curbs were agreed last year.

"The lack of a positive response in oil prices clearly suggests market participants are not convinced that the OPEC's efforts will help shore up prices in a meaningful way in the short-term as shale supply continues to rise in the U.S.," said Fawad Razaqzada, market analyst at futures brokerage Forex.com.

"Unless we see a marked reduction in crude stockpiles, the possibility of further short term falls in the price of oil cannot be ruled out," he added.

The American Petroleum Institute said on Tuesday U.S. crude stockpiles had dropped more than forecast. U.S. crude stocks fell last week, while gasoline and distillate inventories rose.

A government report is due at 10:30 a.m. EDT (1430 GMT) on Wednesday and the official figures often differ sharply from those of the industry group.

OPEC and non-OPEC oil producers' compliance with the output deal reached 106 percent in May, a source familiar with the matter said on Tuesday.

OPEC compliance with the output curbs in May was 108 percent, while non-OPEC compliance was 100 percent, the source said. Another source confirmed compliance by all producers in May was 106 percent.

While compliance is high, it is what went on before the production cut that counts, BMI Research said in a note.

"A number of producers - notably Iraq, Saudi Arabia and Russia - aggressively ramped up output in the run up to the deal, fast-tracking projects, expanding drilling programs and deploying spare capacity," BMI said.

Thus the production cut is not costless and "should prices relapse again, OPEC has much less in its arsenal with which to respond."

(Reporting by Aaron Sheldrick; Editing by Richard Pullin)
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Released:  20/06/20172017-06-20
Word count:  77

The Libyan Foreign Bank (LFB) has announced that a Tunisian court has ruled in its favour in the case brought against it by Tunisian company LMS for US$ 108.7 million.

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Libya herald
LMS had claimed in a Tunisian court that LFB had owed it payment for fuel shipments during the Libyan 2011 revolution and convinced the Court of First Instance to freeze all the accounts of the LFB in Tunisia.

However, LFB appealed and convinced the court of appeal that LMS had in fact failed to deliver all the fuel shipments agreed upon and as a result the appeal court lifted its freeze on the LFB’s accounts this Wednesday.  
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Released:  20/06/20172017-06-20
Word count:  310

Oil markets held around seven-month lows on Tuesday as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices.

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Reuters
Brent futures were up 4 cents at $46.95 at 0214 GMT. On Monday, they fell 46 cents, or 1 percent, to settle at $46.91 a barrel.

That was their lowest since Nov. 29, the day before the Organization of the Petroleum Exporting Countries (OPEC) and other producers agreed to cut output for six months from January.

U.S. West Texas Intermediate crude futures were down 1 cent at $44.19 a barrel. They declined 54 cents, or 1.2 percent in the previous session, to settle at $44.20 per barrel, the lowest close since Nov. 14. The July contract will expire on Tuesday and August will become the front-month.

Both benchmarks are down around 15 percent since late May, when OPEC, Russia and other producers extended by nine months the cut in output by 1.8 million barrels per day (bpd).

"Recent data points are not encouraging," Morgan Stanley said in a research note. "Identifiable oil inventories - both crude and product in the OECD, China and selected other non-OECD countries - increased at a rate of (about) 1 (million bpd) in 1Q."

OPEC supplies jumped in May as output recovered in Libya and Nigeria, two countries exempt from the production cut agreement.

Libya's oil production has risen more than 50,000 bpd after the state oil company settled a dispute with Germany's Wintershall, a Libyan source told Reuters.

Analysts said rising U.S. crude production has fed the global glut. Data on Friday showed a record 22nd consecutive week of increases in U.S. oil rig numbers.

Still, Saudi Energy Minister Khalid al-Falih remained confident OPEC's cuts were working. The oil market is heading in the right direction but still needs time to rebalance, al-Falih told the London-based newspaper Asharq al-Awsat.

"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."

(Reporting by Aaron Sheldrick; Editing by Joseph Radford)
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Released:  19/06/20172017-06-19
Word count:  168

Libya oil production is on course to hit one million barrels per day (b/d) by the end of July, National Oil Corporation chairman Mustafa Sanalla has told the British ambassador, Peter Millett.

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Libya herald
This would the first time such a figure had been reached since 2013 and Sanalla cited his employee’s work ethic as the main reason.

However, Sanalla noted the NOC faced repeated attempts to disrupt and block production. He said he could not understand why people doing did not not realise how important Libya’s key asset, oil, was to the country’s stability and prosperity.

Smuggling, depletion of state resources and the fallout from the Qatar crisis were also discussed.

Referring to a number of trips recently to Libyan oilfields, Sanalla also spoke about the need to improve safety for oil workers, protection of the environmental and helping boost local communities.

Sanalla also hosted the Turkish Ambassador, Ahmet Dogan, who invited the NOC chief to the World Petroleum Council Congress to be held in Turkey next month.

Despite the Turkish embassy having reopened its Tripoli base, Turkish oil companies have not so far resumed operations. Dogan said he hoped Libya would stabilse soon so the companies could return.
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Oil & Gas News
Released:  19/06/20172017-06-19
Word count:  364

Oil prices fell early on Monday, weighed down by high supplies despite an OPEC-led initiative to cut production to tighten the market.

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Reuters
Signs of faltering demand stoked weak sentiment, prompting price levels comparable to when the output cuts were first announced late last year.

Brent crude futures LCOc1 were down 11 cents, or 0.23 percent, at $47.26 per barrel at 0035 GMT.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 11 cents, or 0.25 percent, at $44.63 per barrel.

Prices for both benchmarks are down by almost 13 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended their pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018.

Traders said that the main factor driving the low prices was a steady rise in U.S. production undermining the OPEC-led effort to tighten the market.

"The U.S. oil rig count continued to rise, up by 6 last week ... Since its trough on May 27, 2016, producers have added 431 oil rigs," Goldman Sachs said late on Friday.

The U.S. bank said that if the rig count stayed at current levels, U.S. oil production would increase by 770,000 barrels per day between the fourth quarter of last year and the same quarter this year in the shale oil fields of the Permian, Eagle Ford, Bakken and Niobrara.

Supplies from within OPEC and other countries officially participating in the cuts, like Russia, also remain high as some countries have not fully complied with their pledges.

There are also indicators that demand growth in Asia, the world's biggest oil consuming region, is stalling.

Japan's customs-cleared crude oil imports fell 13.5 percent in May from the same month a year earlier, to 2.83 million barrels per day, the Ministry of Finance said on Monday.

India, which recently overtook Japan as Asia's second biggest oil importer, saw May's demand for oil fall by 4.2 percent in May, compared with the same month last year

In China, which is challenging the United States as the world's biggest importer, oil demand growth has been slowing for some time, albeit from record levels, and analysts expect growth to slow further in coming months.

"Reducing the glut of oil will be challenging," ANZ bank said on Monday.

(Reporting by Henning Gloystein; Editing by Joseph Radford)
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Oil & Gas News
Released:  16/06/20172017-06-16
Word count:  284

Oil prices dipped early on Friday and were not far off six-months lows as an ongoing supply overhang weighed on markets despite an OPEC-led effort to cut production and prop up prices.

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Reuters
Brent crude futures LCOc1 were down 6 cents, or 0.1 percent, at $46.86 per barrel at 0045 GMT.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 8 cents, or 0.2 percent, at $44.38 per barrel.

Prices for both benchmarks are down by more than 13 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended a pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018.

The price falls are due to ongoing high supplies despite the pledge to cut from within OPEC, and also because of rising output from the United States.

"Oil production in the U.S. was ... higher (and) oil tanker tracker data also suggests OPEC shipments remain strong," ANZ bank said. High exports and production from other countries, including Russia and the United States, are also contributing to the ongoing glut.

Top producer Russia, not an OPEC-member but participating in the deal, is expected to export 61.2 million tonnes of oil in the third quarter (around 5 million bpd), against 60.5 million tonnes in the second quarter, via pipelines, according to industry sources and Reuters calculations.

Add in Russia's tanker shipments and its total exports are likely above 9 million bpd.

In the United States, which is not participating in any deal to hold back production, oil output C-OUT-T-EIA has risen over 10 percent over the past year to 9.3 million bpd, and the Energy Information Administration (EIA) expects that figure to rise above 10 million bpd in 2018.

In a sign of the ongoing supply overhang, traders are increasingly hiring tankers again to store unsold crude, waiting to sell later at a higher price.

(Reporting by Henning Gloystein; Editing by Richard Pullin)
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Released:  16/06/20172017-06-16
Word count:  200

The chairman of the Libyan Council for Oil and Gas (LCOG), Khaled Ben Othman expects that Libya’s oil production will surpass the one-million-barrel mark by the end of the year. The NOC confirmed yesterday that production is currently at 830,000 bpd. The LCOG represents the Libyan private sector in the hydrocarbon sector.

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Libya herald
Ben Othman said that he expects that the temporary agreement reached between the NOC and Wintershall yesterday (for fields NC 96 & 97) would add between 85-90,000 barrels per day in the short term. Moreover, he added that the opening of the Abitifel and Nafoura fields (103A) yesterday and today would soon boost production to 930-950,000 bpd.

Ben Othman warmly welcomed the NOC-Wintershall agreement which he revealed he and the LCOG had been working hard on in the background over the last few months – liaising and mediating between all parties to achieve. He revealed that there was goodwill on all sides to reach the agreement as a win-win for all.

The LCOG chairman explained that Wintershall will be entitled to between 85-90,000 bpd as a result of the agreement in order to ‘‘cover its costs’’ with the balance going to the NOC. Meanwhile, both parties will continue to negotiate on a long term deal within the ‘‘2010 EPSA-4 framework’’, Ben Othman explained.

Post the Qaddafi era, and with the onset of stability and peace in Libya, Ben Othman looked forward to a much fairer and greatly increased role for local Libyan companies in the development and maintenance of the Libyan oil and gas sector.

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Released:  15/06/20172017-06-15
Word count:  267

The EU is to give another €5 million ($5.62 million) to the Stabilisation Facility for Libya (SFL) to improve basic public services, its ambassador Bettina Muscheidt announced today in Tripoli. She made the announcement following a meeting of the SFL’s board today in Tripoli’s Corinthia Hotel.

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Libya herald
The SFL, which is co-chaired by the Presidency Council’s Ministry of Planning and the UN Deputy Special Representative in her capacity as head of the UNDP in Libya, was launched in April last year and aims to rehabilitate crucial infrastructure at local level.

The focus is on areas of the country damaged as a result of fighting either during the revolution or since – specifically Benghazi, Kikla, Obari, Sebha and Sirte.

Last year just over $32 million was donated, including a first €5 million from the EU. This has been used to fund a number of projects, such as new ambulances for Sirte’s Ibn Sina hospital, two ambulances and a garbage truck for Obari, solar panels and generators for hospitals, computers for schools, municipal internet services.

Muscheidt told reporters that “Libya’s people cannot wait. Families across the country are in dire need of services. They want a return of normality”.

“This is where the Stabilisation Facility can make a difference in helping the Libyan government to improve lives and alleviate the suffering in areas most affected by the conflict across regions of Libya. The priority is to facilitate the return of public services,” she added.

The SFL’s target is $60 million, of which half is supposed to come from the government of national unity (GNA) and half from foreign donors.

Attending today’s board meeting were ambassadors from a number of donors including those of France, Italy, South Korea and the UK as well the EU’s Muscheidt and the PC’s Planning Minister Taher Al-Juhaimi. So far, nothing is reported to have come from the GNA.
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Oil & Gas News
Released:  15/06/20172017-06-15
Word count:  313

Oil prices wallowed near their lowest levels in seven months early on Thursday, hurt by high global inventories and doubts over OPEC's ability to implement production cuts.

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Reuters
Brent crude futures were at $47.01 per barrel at 0222 GMT, virtually steady after slumping nearly 4 percent in the previous session. U.S. West Texas Intermediate (WTI) crude futures were at $44.70 per barrel, also little changed from their last close.

Both benchmarks are hovering near levels last reached in late November last year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced in an effort to prop up prices.

"For OPEC, an oversupply headache became a migraine," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

Brent and WTI are down some 12 percent since their opens on May 25, when the agreement to cut was extended to the end of the first quarter next year, instead of expiring this month as initially planned.

"OPEC 2017 year-to-date exports are only down by 0.3 million barrels per day (bpd) from the October 2016 baseline," analysts at AB Bernstein said in a note to clients.

OPEC's pledge was to cut some 1.2 million bpd, while other producers including Russia would bring the total reduction to almost 1.8 million bpd.

However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.

Meanwhile, production in the United States - which is not participating in the deal - has jumped by more than 10 percent over the past year to 9.33 million bpd.

"Production growth in Libya and Nigeria and continued rig additions in U.S. are complicating the picture, raising doubts on OPEC's strategy. For OECD inventories to return to the normalized levels, OPEC needs to drain by 34 million barrels a month or 1 million barrels for the next 10 months. This looks challenging," AB Bernstein said.

The International Energy Agency (IEA) said this week that oil supplies next year would still outpace demand despite consumption hitting 100 million bpd for the first time.

(Reporting by Henning Gloystein; Editing by Richard Pullin)
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Released:  14/06/20172017-06-14
Word count:  386

Oil prices fell on Wednesday after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back on output.

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Reuters
Brent crude futures LCOc1 were at $48.41 per barrel at 0652 GMT, down 31 cents, or 0.6 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $46.10 per barrel, down 36 cents, or 0.8 percent.

Crude prices have fallen by more than 10 percent since late May, pulled down by an supply glut that persists despite a move led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.

OPEC's own compliance with the cuts has been questioned, and the producer group said in a report this week that its output rose by 336,000 bpd in May to 32.14 million bpd.

ANZ bank said in a note to clients that prices were "under pressure earlier in the day after a report from OPEC showed that its production had increased."

Adding to the supply surplus is rising U.S. production from shale drillers that has pushed U.S. output up by 10 percent over the last year to 9.3 million bpd, not far below levels by top exporter Saudi Arabia. C-OUT-T-EIA

"The outlook for oil hinges on the effectiveness of the OPEC cuts relative to the supply increases from U.S. shale," said William O'Loughlin, analyst at Australia's Rivkin Securities.

Data from the American Petroleum Institute showed on Tuesday that U.S. crude stocks rose by 2.8 million barrels in the week to June 9 to 511.4 million, compared with expectations for a decrease of 2.7 million barrels. [API/S] With supplies plentiful, strong demand is needed to support the market, but there are signs of a slowdown.

Global energy demand grew by 1 percent in 2016, a rate similar to the previous two years but well below the 10-year average of 1.8 percent, BP (BP.L) said in its benchmark Statistical Review of World Energy on Tuesday.

More specifically for oil, there are signs of a slowdown in China, long the key component of fuel demand growth, as its economy slows. The nation's refiners have produced too much fuel for it to consume, forcing a drop-off in activity.

"Chinese demand is slow ... so we have a build-up of crude in Asia where demand seems to have slowed for now," said Oystein Berentsen, managing director for oil trading company Strong Petroleum.

(Reporting by Henning Gloystein; Editing by Tom Hogue and Christian Schmollinger)  
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Released:  14/06/20172017-06-14
Word count:  345

Libya's National Oil Corporation (NOC) and German oil firm Wintershall have agreed an interim deal to resume production, a step forward in a contract dispute that was blocking up to 160,000 barrels per day.

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Reuters
NOC said on Tuesday the arrangement would allow an immediate resumption of production at Wintershall's NC 96 and NC 97 concession areas in eastern Libya, as well as connected fields where production has been blocked. A Wintershall spokesman confirmed the agreement.

NOC Chairman Mustafa Sanalla told Reuters by phone from the oilfields on Tuesday that some wells at one of the affected fields, Abu Attifel, had already begun operating and production should resume there by Wednesday.

Abu Attifel is operated by Mellitah, a joint venture between the NOC and Italy's ENI and has been closed since July 2015. Sanalla said he could see gas flares being relit as he was driving to the field with local officials.

"Everybody is happy. We are all celebrating," he said.

Sanalla said the NOC was targeting an increase in national production to one million barrels per day (bpd) by the end of July from 830,000 bpd now. He said Abu Attifel alone should rapidly be able to produce 50,000-60,000 bpd.

Libya's output remains well below the 1.6 million barrels a day it was producing before the 2011 uprising. Armed conflict, political disputes and local blockades have made production levels highly volatile since then.

The dispute with Wintershall had caused a rift between the NOC and the U.N.-backed government in Tripoli. The NOC accused the government of siding with the German company and trying to appropriate powers over oil sector contracts in the process.

The NOC said Wintershall had failed to honour a 2010 memorandum of understanding to convert its concessions to EPSA IV terms, or the standard NOC contract that governs deals with international oil companies in Libya.

Wintershall had said its concession deals with Libya were still valid.

The NOC said in a statement that the agreement announced on Tuesday, "allocates to Wintershall an amount of production sufficient to cover its costs, with all remaining production being allocated to NOC".

"It also provides that during this interim arrangement, the parties will attempt to resolve their dispute regarding the legal framework governing the petroleum operations."

(Additional reporting by Patricia Weiss; editing by David Clarke)  
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Released:  14/06/20172017-06-14
Word count:  113

The Beida-based Central Bank of Libya (CBL) has begun distributing in east LD337 million of a new consignment of Russian printed dinars, which its counterpart in Tripoli last year agreed to accept as a legitimate currency.

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Libya herald
According to the Beida institution, the Jumhouria Bank has received LD96 million, Wahda LD91 million, Commercial LD75 million, North Africa LD31 million, Sahara LD25 million, Trade and Development LD10 million and the Mediterranean and Ejmaa Alarabi banks LD4 million each. It is unclear where the remaining LD1 million went.

The Beida CBL gave no details of when this latest tranche of “Russian” dinars arrived. The first shipment of these notes (LD200 million) was delivered to Labraq Airport in May last year.

There have since been at least three further consignments amounting to LD1.6 billion. When the new note was first announced, the Beida CBL said it was ordering a total of LD4 billion.
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Business News

Business News
Released:  13/06/20172017-06-13
Word count:  117

Libya Telecom (LT) says it is suppling and installing combined radio navigation systems known as VOR/DME, initially to Mitiga, Benina, Tobruk and Labraq airports.

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Libya herald
VOR/DME is a combined radio navigation station for aircraft, which consists of two radio beacons, placed together, a VHF omnidirectional range (VOR) and distance measuring equipment (DME). VOR produces an angle between the station and the receiver in the aircraft, while DME does the same for range.

LT said that it will give training in the use and maintenance of the equipment in a programme that is expected to begin shortly.

LT’s chairman Faisel Gergab said his company would continue to contribute to the development and improvement of the infrastructure in all airports in Libya.

No mention was made of the overall cost, who will be meeting it nor who has supplied the original apparatus.
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Oil & Gas News

Oil & Gas News
Released:  12/06/20172017-06-12
Word count:  370

Oil prices rose on Monday as futures traders bet the market may have bottomed after a recent steep fall, even as physical markets remain bloated by oversupply, especially from a relentless rise in U.S. drilling.

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Reuters
Brent crude futures were trading at $48.41 per barrel at 0246 GMT, up 26 cents, or 0.5 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $46.07 per barrel, up 24 cents, or 0.5 percent.

Traders said that the price rises came on the back of speculative traders upping their investment into crude futures, by taking on large volumes of long positions, which would profit from a further price rise.

The rise in new long positions comes after Brent and WTI crude futures have fallen by around 10 percent below their opening levels on May 25, when an OPEC-led policy to cut oil output was extended to cover the first quarter of 2018 instead of expiring this June.

"Wall Street's oil bulls have reset for a technical bounce," said Stephen Schork, author of the Schork Report, which specialises in oil and gas market analysis.

While the financial market seems to have some confidence that prices may have bottomed out, the physical market remains bloated, especially due to a rise in U.S. drilling for new oil production.

U.S. energy firms added eight oil rigs in the week to June 9 , bringing the total count up to 741, the most since April 2015, energy services firm Baker Hughes Inc (BHI.N) said on Friday.

This ongoing drive to find new oil has driven up U.S. output by more than 10 percent since mid-2016, to over 9.3 million bpd, a figure the U.S. Energy Information Administration (EIA) says will likely rise above 10 million bpd by next year, challenging top exporter Saudi Arabia.

Soaring U.S. output threatens to undermine an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut almost 1.8 million bpd of production until the first quarter of 2018 in order to tighten markets and prop up prices.

Despite this, Russian energy minister Alexander Novak said on Sunday said on Sunday there was no need to review the agreement on reducing oil output as it was too early to make any decisions.

Russia, not a member of OPEC, is the world's biggest oil producer but it is participating in the production cuts. Saudi energy minister Khalid Al-Falih made similar statements over the weekend.

(Reporting by Henning Gloystein; Editing by Richard Pullin and Joseph Radford)  
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