Saudi Arabia still bears brunt of oil cuts as OPEC output drops
LONDON (Bloomberg) -- Saudi Arabia continued to lead OPEC’s efforts to cut production, helping the organization get closer to a goal set out in a historic accord last year.
Riyadh lowered oil supply by 90,000 bbl to 9.78 MMbpd in February from a month earlier, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. It was the second month in a row that the world’s biggest crude exporter pumped below its own target of 10.06 million barrels a day.
Overall, OPEC’s production fell to 32.17 MMbpd in February, a 65,000 bpd drop from January, the first month of the accord. Accounting for the members who raised output and the suspension of Indonesia, total output remains 415,000 bpd above the target set out in the Nov. 30 deal. That means the group as a whole is only about 70 percent of the way toward the production level it deemed necessary to eliminate a global oversupply and boost prices.
Iraq’s production dropped by 50,000 bbl to 4.44 MMbpd, the survey showed. A strike by oil workers in Gabon -- the tiniest member -- contributed to a decline of 15,000 bpd. Angola, among the most compliant members in January, failed to meet its target in February after the start-up of two oil projects. Output there ramped up 20,000 bbl to 1.69 MMbpd.
Iran’s output increased to 3.83 MMbpd, slightly above its goal of 3.797 MMbpd. As part of the deal, Iran was allowed to increase supply after years of sanctions that hurt its oil industry. Libya and Nigeria -- both exempt from the accord -- saw combined 50,000 bpd growth.
Benchmark Brent crude prices have rallied about 20% since the November pact amid optimism the market will re-balance following three years of glut. OPEC will decide at a meeting in May whether to prolong the accord past June 30.
Investors are also paying close attention to Russia and 10 other oil-producing countries, which struck a supply deal with OPEC in December. A monitoring committee last week found the non-OPEC countries achieved 66% of their pledged cuts for January.
