In a weekly report, it said that rapid increase in Libyan production, amid weak demand, has thrown the market off balance. However, OPEC may readjust production prior to the November meeting.In recent months, Libya’s rebound in production has surprised market participants, rising from 220 kb/d in May to over 550 kb/d in late August. With domestic demand at roughly 150 kb/d, around 400 kb/d is being marketed for export. The flood of Libyan barrels into the global market has pressured other light grades, including WAF and North Sea crudes.
In Libya, clashes between the government and militant groups in the north and between ethnic groups in the south continue unabated, threatening energy infrastructure. In a recent Barclays Petroleum Policy Intelligence event, it was noted that armed groups are able to stop field operations, block pipelines and occupy terminals and refinery complexes. In particular, the proximity of fighting to the ports of Ras Lanuf and Es Sider present an ongoing threat.

There are also problems further upstream. The rapid shutdown of eastern fields in 2011 and 2013 likely caused damage to those fields’ production capabilities. As a result, it may not be possible to restore those fields to pre-2011 production levels. Damage to surface facilities
and the oil sector’s power sources will require repair before ramping up. And, gas production for power generation has been disrupted according to PPI. Unfortunately, staffing in Libya is scant, and a severe shortage of foreign contractors means repairs will not be completed anytime soon.

Furthermore, the current market supply of light crude seems to be sufficient to meet global demand. In fact, producers of light crude, including Libya, are having trouble selling cargos. Buyers are particularly wary of Libyan crude because of the security risks associated with loading a tanker in close proximity to militant clashes.
Source: Barclays