This year's conflict in Libya caused that oil production in this country fell below 100,000 barrels per day. However, the ceasefire reached in mid-August meant that production returned quite quickly above this level. However, at the end of last week, production increased to 300,000 barrels per day. With the resumption of production in the largest oil field in the country - Sharara, production may even double, if no technical problems arise (currently production in this field is about 40,000 barrels per day, but may even increase to 300,000 barrels per day).
This is not good news for the OPEC group, which intends to reduce production cuts quite drastically from the beginning of next year (cuts are to be reduced by 2 million barrels per day). Meanwhile, JP Morgan predicts that production in Libya may return above the level of 1 million barrels from March next year. Moreover, Libya should still be exempt from the production cut agreement, given that the cuts are based on production levels from October 2018, when Libya's production was over 1.1 million barrels per day and was later obliged to reduce production to the level of approx. 950 thousand barrels per day. This means that Libya could maintain production levels around 1 million barrels per day.
WTI crude oil is trading below $40.00 a barrel. The nearest strong support is located around 200 hour moving average at $ 39.5. If this level is broken, another potential target for sellers is located at $ 39.00 a barrel. On the other hand, we will be dealing with short-term downside prospects until the supply zone between the 50 and 100 period moving averages is broken. Source: xStation5
