Nigeria continues to maintain top spot as Africa's largest oil producer

Nigeria continues to maintain top spot as Africa's largest oil producer

The U.S. Energy Information Administration said late on Tuesday that it expected 2018 crude oil output to rise to 9.9 million barrels per day (bpd) from 9.3 million bpd this year, a 570,000 bpd increase.

The Organization of the Petroleum Exporting Countries (OPEC) pumped 32,611 million barrels per day in June, 393,500 barrels more than in May.

Some preliminary reports show OPEC production inching higher in June, mostly led by Nigeria and Libya, the two member nations exempt from the OPEC production cut deal. OPEC cuts are expected to be extended and reports that both Libya and Nigeria will agree to a production quota puts the fate of global oil prices in the hands of us producers. Officials from Libya and Nigeria may attend the meeting, according to a Reuters report.

Despite a large weekly drop in crude inventories, banks continue to mark down oil prices.

US production is expected to increase in 2018, albeit at a lower rate than previously estimated. US crude gained 93 cents to $45.97.

A Saudi industry source said that Riyadh planned to reduce shipments in August by more than 600,000 bpd, taking exports for that month to their lowest this year.

West Texas Intermediate for August delivery rose 8 cents to $44.48 a barrel at 9.58am on the New York Mercantile Exchange. It further added that the catalyst could be further intervention by OPEC or a steady drop in US crude stockpiles and the nation's rig count. In addition, market patience is wearing thin, with global inventories still higher than the five-year average, pointing to the fact that OPEC cuts have not effectively erased the glut as the cartel had expected. "Algeria's current crude production is 1.7 million barrels per day".

OPEC agreed to cut oil production at the end of a year ago to prop up oil prices.

The EIA does forecast production to average 9.9 million b/d in 2018, which would mark the highest annual average production in US history, surpassing the previous record of 9.6 million b/d set in 1970.

A separate report from the Energy Information Administration (EIA) highlighted the mounting challenges to the U.S. energy sector, which are poised to produce significant consequences for the oil market next year.

U.S. production rose to 9.338 mbpd in the week ended June 30, 2017, up from a week ago level of 9.25, near its 22-month high of 9.35 mbd. United States crude inventories remain more than 100 million barrels above the five-year average and the oil rig count is at the highest level since April 2015.

Against these doldrums, news of diminished US output led to an oil rally in late June.

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