Vitol Sees Oil Struggling to Break Above $60 per Barrel by End-2016

U.S. producers of shale oil have been some of the biggest losers in the battle for market share that the Organization of the Petroleum Exporting Countries has waged over the last year and are expected to deliver their most aggressive cut to output in November on record.

The risk to the oil market balance is that the void left by shuttered U.S. shale capacity could be quickly filled by Iran and Libya, which is producing around 400,000 bpd, a fraction of the 1.6 million bpd of its heyday prior to 2011.

"Can the market make room for (Iran)? Probably yes, but I'm not sure the market can make room for that and a doubling or tripling of Libyan production, which is my other big worry," Taylor said.

"The Libyans could easily get back 300,000 or 400,000 bpd. If you have 500,000 from Iran and 400,000 from Libya and you lose 1 million barrels from the Americans, you're back to where you started, which is why I don't see the market moving hugely."

(Additional reporting by Alex Lawler; Editing by Dale Hudson)


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