OPEC task gets tougher as Libya set to boost oil production

OPEC Meeting in 2011 Cancilleria Ecudor CommonsOPEC Meeting in 2011 (Image source:Cancilleria Ecudor/Commons)Libya's target to raise production from 600,000 to 1.1mn bpd by the end of 2017 scuppers OPEC and their plans to cut production to deal with the low oil price

Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), has stated via the state-run National Oil Corp, that they are planning to increase from its current production level of 600,000 bpd to 900,000 by the end of the year, and 1.1mn bpd by the end of 2017. Chairman of National Oil Corp, Mustafa Sanalla released the statement in order to continue its production level rise and push ahead with plans to double production to maintain its position of North Africa's largest oil exporter. 

OPEC are at a crossroads as some officials are calling for a ceiling limit of production to be introduced in order to reduce the global surplus of oil which, in turn, is driving down the cost per barrel, heavily reducing the margins for oil companies. This is also having a serious impact on operating and efficiency costs. 

There is an increased risk that if Libya reach these targets, it will continue to drive down the price of oil. The price fell in January 2016 to less than US$28 per barrel, and while the price is at around US$45 per barrel at the moment, many analysts are warning that the US$20 mark could still be reached. One major factor of this, out of OPECs hands it the devaluation of the Chinese currency. 

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