| LONDON, June 9
LONDON, June 9 Two weeks after an OPEC-led deal
to extend oil output cuts until March, some OPEC delegates are
questioning whether the agreement will be enough to reduce a
glut in supplies and lift prices.
Prices have fallen more than 10 percent to below $50
a barrel since the Organization of the Petroleum Exporting
Countries and allies agreed on May 25 to prolong a deal to cut
about 1.8 million barrels per day (bpd) until the end of March.
The deal was initially due to run during the first half of 2017.
Even a political dispute between Gulf states, the source for
most of OPEC's crude, has failed to drive prices higher.
Instead, eyes are trained on Nigeria and Libya, two OPEC
states that were excluded from the regime of cuts to help them
recover from years of unrest that had hurt production. Both now
report rising output.
This is adding to concerns among some in OPEC about the
effectiveness of the accord to reduce output, whose impact is
already being eroded by surging U.S. shale production.
One OPEC delegate told Reuters that a deal to curb
production "without freezing Libya and Nigeria is useless."
Nigeria's exports are expected to reach a 15-month high in
June of about 1.75 million bpd. Libyan output has hit its
highest since October 2014, rising above 800,000 bpd.
At the May meeting, OPEC discussed whether to assign output
caps to Nigeria and Libya but agreed not to. The group also
considered a larger production cut, an idea that it could revive
in future, delegates have told Reuters.
A second OPEC delegate also said on Friday that it was not
clear that the level of existing cuts was enough.
"It's difficult to say. We hope so," the delegate said. "We
need to wait another month to see how it develops. There are a
lot of factors involved."
A third delegate said oil-market fundamentals were
improving, indicating the current drop in prices was not driven
by supply and demand but rather by speculators.
However, two other delegates said the oil price drop was
temporary and the current supply cut pact was enough.
"It is not a cause for alarm - it is normal," one of them
said of the price fall, adding that he believed the market would
still rebalance in the second half of the year.
Oil prices have recovered from below $30 a barrel in 2016,
helped by the pact. But with the price hovering below $50 now,
it is half its level of mid-2014 and less than the $60 top
exporter Saudi Arabia has said it would like to see.
(Additional reporting by Rania El Gamal; Editing by Edmund