Libya launched a tanker carrying 800,000 barrels of oil on October 6, indicating they are returning to the world oil market. Libya also announced they are going to expand production throughout the rest of the year, including November, the month OPEC agreed to cut production in reaction to two years of falling oil prices.
Although Libya was exempt from the new OPEC production quotas, their projected increases in oil output are likely to make up the 700,000 barrels per year that the rest of the organization will reduce. This decision could defray a rise in oil and gas prices expected from OPEC’s September agreement.
Adding to the global oil glut, Alaskan and Texan oil companies recently discovered new oil and natural gas fields. In addition, neither of these new resources are shale reserves, which are expensive to extract oil from and thus require relatively high prices to justify production. Coupled with the increased Libyan output, the discovery of these fields could keep oil prices low for the time being.
Copyright for image: jbd30 / 123RF Stock Photo
Ashton DeLano is a junior at the George Washington University pursuing a Bachelor of Science in Economics with minors in Business Administration and Computer Science. He intends to cover developments in the health and energy sectors and the impact of new technologies on the consumer.