Libyan fields in the east and west may produce 550,000-600,000 barrels a day of oil soon, with production reaching 1 million barrels a day in six months, OPEC's secretary-general said. There is little damage from the North African nation's armed conflict in fields in the east and west, where there was less fighting, Abdalla El-Badri said Monday at Dubai conference. Libya's oil output will reach about 700,000 barrels a day by the end of this year, said Abdulla Saudi, the nation's representative to a Sept. 15 meeting of Arab central bank governors. As Libyan output resumes, OPEC nations that raised output to replace the lost volumes will cut back, he said. "As Libya increases output, the countries that increased their production, they will watch and they will reduce their production. That doesn't require any meeting," El-Badri said. The National Transitional Council is working to establish its authority in the capital Tripoli following a 7-month armed conflict to end Muammar Qaddafi's four-decade rule, which shut the country's crude oil output. Members of the council are meeting in the eastern city of Benghazi today to form a cabinet, interim Prime Minister Mahmoud Jibril said in a news conference. The Organization of Petroleum Exporting Countries, of which Libya is a member, will recognize Libya's NTC as the country's representative, El-Badri said. OPEC member states that don't recognize the NTC can maintain bilateral relations with Libya, he said. There is a $16-$20 premium in oil prices because of Libya and other risks, even as global demand rises less than expected, el-Badri said. New York oil has averaged about $96 a barrel this year, compared to about $80 last year. It was at $86.78 a barrel at 10:49 A.M. in London. Economic stimulus plans in the US and Europe are "not really working," El-Badri said. "There's no real investment in the US and Europe that leads to production," and you can't create oil demand by using stimulus cash for speculation. OPEC's 12 nations, which supply 40 percent of the world's oil, are investing $312 billion to add 21 million barrels a day in capacity from 2011-2015, El-Badri said. The group may consider reinstating Iraq into the quota system at the end of 2012, he said.
