IEA sees oil market rebalance but warns of Libya, Nigeria surge

Fatih Birol of the International Energy Agency. (Dave Rossman photo)

U.S. shale drillers aren’t the only ones threatening to offset OPEC’s oil production cuts.

Signs of a resurgence of oil production in Libya and Nigeria, both OPEC members, has the potential to dampen the cartel’s efforts to curb the global oversupply of oil, the International Energy Agency said Tuesday.

In its monthly oil market report, the Paris-based group noted Libya has raised oil production to 800,000 barrels a day, the highest point in three years, according to its preliminary data. “Any significant increase clearly offsets cutbacks by other OPEC and non-OPEC countries,” it said.

OPEC officials will meet next week in Vienna to talk about extending oil production cuts that have stabilized oil prices but haven’t rebalanced the global oil market yet.

Related: OPEC projects surge in U.S. oil production

Still, global oil supply and demand nearly realigned in the first quarter after a nearly three-year oversupply, and the oil stuck in storage tanks around the world shrank by 1 million barrels a day in March, the IEA said.

In the first quarter, the IEA said, “we might not have seen a resounding return to deficits but this report confirms our recent message that the re-balancing is essentially here and, in the short term at least, is accelerating.”