Saudi Arabia leads OPEC producers in crude output cuts

OPEC’s oil output declined by 890,000 barrels per day (bpd) in January to 32.14 million barrels per day (mbd), with Saudi Arabia, Iraq, and the United Arab Emirates leading production cuts, the producer group said in its monthly report Monday.

Saudi production dropped to 9.9 mbd in January, from 10.4 mbd the previous month, based on data from secondary sources. According to data directly submitted by the kingdom, however, Saudi output fell to 9.7 mbd during the month.

Production in Nigeria, Libya and Iran, meanwhile, increased, the report said.

Crude prices fell on Monday ahead of the report, and following news of higher US production. Global benchmark Brent crude was last trading 0.5 percent lower at $56.41 per barrel (bbl), while West Texas Intermediate also slipped 0.5 percent to $53.6/bbl.

OPEC’s output is under the ceiling of 32.5 mbd set by the group’s production agreement last year, when it pledged to cut back production by 1.2 mbd starting January 2017.

The cartel’s share of total global crude production stood at 33.5 percent last month, 0.5 percent lower from December, the group said.

OPEC agreed with 11 non-member producers in December to cut production by a combined 1.8 mbd for a period of six months. The deal was part of efforts to rebalance the market and boost oil prices, which have more than halved since late-2014.

Last Friday, Paris-based International Energy Agency (IEA) said that members of the cartel had achieved a record 90 percent compliance last month with the agreed upon production cuts.

Lower output from OPEC and non-members led to world oil supply falling by 1.29 mbd month-on-month and 0.46 mbd year-on-year in January to average 95.75 mbd, the OPEC report said.

For 2017, the forecast for non-OPEC supply growth was revised up by 120,000 bpd to average 57.44 mbd, representing growth of 0.24 mbd.

The upward adjustments were attributed to increased drilling activity and investment in the US, leading to higher onshore crude oil and natural gas liquids (NGLs) production.

On the demand side, world oil demand growth is seen to reach 1.19 mbd in 2017, an upward revision of 35,000 bpd to now average 95.81 mbd.

US drillers added eight oil rigs in the week to Feb. 10, taking the total count to 591, according to data from energy services firm Baker Hughes. 

Write to Jerusha Sequeira at jerusha.s@argaamnews.com