* Libya output threatened by fighting over export sites reut.rs/2n3HpXV
* Nigeria's militants calm, outlook still unpredictable tmsnrt.rs/2j4spa2
* U.S. shale production, U.S. stock build a bigger threat
By Libby George and Ahmad Ghaddar
LONDON, March 14 When OPEC reached a deal last
year to cut oil output, the decision to exclude Nigeria and
Libya from the restrictions was seen as a risk to the group's
efforts to curb a global crude glut.
An oil price rally has already stumbled since the deal, but
Nigeria and Libya are not to blame. Output from both nations has
slipped since December and violence in the two African states
makes their ambitions to hike production look optimistic.
"The success of these cuts, debatable as they may be, will
not hinge on Nigeria and Libya," said ING analyst Hamza Khan.
OPEC members and non-OPEC producers agreed to cut output by
1.8 million bpd for six months from Jan. 1. OPEC has broadly cut
the amount pledged, while others have not delivered in full.
After rallying above $58 a barrel in January, Brent
has now slipped to around $51, under pressure from bulging U.S.
inventories and rising U.S. shale production.
Since the OPEC deal, Libyan production has dipped to 615,000
barrels per day (bpd) from 630,000 bpd in December, as militias
battle to control export sites in the east of the country. Libya
was producing 1.6 million bpd in 2011. PRODN-LY
In Nigeria, militant attacks in the oil-producing Niger
Delta have hobbled output, forcing the closure of the Trans
Forcados Pipeline for all but a few weeks since February.
Maintenance on the Shell-operated Bonga field has also
Nigerian output in March is now expected to be about 1.43
million bpd, down from 1.54 million bpd in December, after
February's brief rise to 1.65 million bpd. Nigeria is chasing a
target of 2.2 million bpd, last achieved in 2012, according to
Reuters calculations. PRODN-NG
Morgan Stanley forecasts Libyan production could rise to
900,000 bpd in the second half of 2017, while Nigeria could
produce 1.6 million bpd in the same time frame. But the U.S.
bank says unrest could undermine both those targets.
"It is possible that unplanned disruptions increase
further," Morgan Stanley said in a March 10 research note.
Libya's prospects look particularly unpredictable. Since
Libyan leader Muammar Gaddafi was toppled in 2011, the North
African nation has fractured as militias battle for power.
"With three rival governments, extremely weak state
institutions, and an abundance of armed actors, Libya is
anything but a stable and reliable producer," Royal Bank of
Canada analysts wrote in a note.
In Nigeria, industry sources have told Reuters that repairs
are nearing completion on the Trans Forcados Pipeline, which
could swiftly add 250,000 bpd to output.
But attacks have repeatedly put the pipeline out of action
and could do so again if peace talks with militants seeking a
bigger share of oil revenues fail.
Even if Nigeria and Libya deliver on production goals
-adding a combined 550,000 bpd, based on the most optimistic
forecasts - it will still pale compared to the challenge OPEC
faces from U.S. shale oil producers, who are adding capacity.
Buoyed by the price revival since OPEC agreed cuts, U.S.
shale firms are expected to add 79,000 bpd of extra production
in March alone, reaching total output of 4.87 million bpd.
Meanwhile, rising U.S. inventories are overshadowing OPEC's
efforts, with the U.S. Energy Information Administration
reporting a rise in the week to March 3 of 8.2 million barrels
to a record 528.4 million barrels.
"Storage numbers out of the United States, that's what would
be keeping the bulls up at night," said ING analyst Khan.
(Editing by Edmund Blair)