From Reuters: http://www.reuters.com/article/us-global-oil-idUSKBN14B05F
Expect Libya to make progress but not in a straight line:
“Libya’s National Oil Corporation (NOC) said it hoped to add 270,000 barrels per day (bpd) to national production after it confirmed on Tuesday that pipelines leading from the Sharara and El Feel fields had reopened. NOC said that Sharara output reached 58,000 bpd on Wednesday.
“Short-haul crude oil supplies to Europe are increasing with the restart of Libya and that will provide a cap for European crude oil strength,” Olivier Jakob, managing director of PetroMatrix consultancy, said.
Libya recently doubled output to 600,000 bpd, and Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance, said the country had the capacity to ramp up production further, to as much as 1.2 million bpd.”
But this is key:
“”It is a safe assumption particularly in the early stages that OPEC and non-OPEC producers will abide by the agreement to curb output,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“If you look at where the biggest production cuts are coming from, it’s largely about the Gulf states and Russia – this gives me even more comfort there will be material compliance,” he said.”
Options markets seem to agree that a floor is in place, at least short term… Implied volatility has moved below 30% which is below its long term average of around 33… There are producer hedges being put on throughout Cal17 and puts and put spreads have been actively bought in March, but overall, the options market has calmed way down…
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