London: Saudi Arabia continued to lead Organization of the Petroleum Exporting Countries (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 barrels to 9.78 million barrels a day 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 million barrels a day in February, a 65,000 barrel-a-day 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 barrels a day above the target set out in the 30 November deal. That means the group as a whole is only about 70% 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 barrels to 4.44 million barrels a day, the survey showed. A strike by oil workers in Gabon—the tiniest member—contributed to a decline of 15,000 barrels a day. 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 barrels to 1.69 million barrels a day.
Iran’s output increased to 3.83 million barrels a day, slightly above its goal of 3.797 million barrels a day. 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 barrel-a-day 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. The Organization of Petroleum Exporting Countries will decide at a meeting in May whether to prolong the accord past 30 June.
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. Reuters