Despite the current massive production losses in Libya, a media report on Friday, according to which six sources close to OPEC indicated that the eight OPEC countries would stick to their announcement and reduce voluntary cuts from October, caused a massive setback in the oil market, Commerzbank’s commodity analyst Barbara Lambrecht notes.

OPEC to ‘pay’ for its phase-out with significantly lower prices

“The price of Brent crude fell from just over $80 to just under $77 per barrel. On the one hand, the window of opportunity for production increases of around 180,000 barrels per day per month seems favorable in view of the massive production shortfalls.”

“On the other hand, it is not possible to predict 1) how long the production losses in Libya will last – the UN is already trying to mediate between the parties to the conflict; 2) whether Iraq (and Kazakhstan) will actually compensate for the overproduction from September and reduce their production; and 3) whether global demand for oil will actually recover as strongly in the second half of the year as the IEA has so far assumed.”