OPEC output falls as Saudi continues to cut production

Saudi Arabia’s crude oil production fell by 350,000 barrels per day (bpd) to average 10.21 million barrels per day (mbd) in January, the Organization of Petroleum Exporting Countries (OPEC) said in its latest monthly oil market report on Tuesday, citing secondary sources.

The direct communication figures showed the Kingdom had lowered its production by 401,000 bpd to 10.24 mbd last month, it added.

Total OPEC-14 preliminary crude oil production averaged 30.81 mbd in January, a reduction of 797,000 bpd over the previous month, the report said, stating output declined were primarily seen in Saudi Arabia, the UAE, Kuwait and Angola.

Separately, Saudi Energy Minister Khalid Al-Falih told Financial Times that the Kingdom would reduce production to nearly 9.8 mbd from above 11 mbd in November 2018, with exports falling to 6.9 mbd, down from 8.2 mbd three months ago.

In the latest report, OPEC revised its oil demand growth lower by 0.05 mbd to 1.24 mbd, to reach an average of 100 mbd this year, due to lower economic expectations for the OECD Americas, Europe, Latin America and the Middle East.

In January, Brent averaged 4.4 percent higher month-on-month (MoM) at $60.24 a barrel, while WTI climbed 5.2 percent MoM to average $51.55 per barrel.  

"Crude oil prices improved over the month buoyed by robust market fundamentals and signs of tightening crude supply, as well as firm crude oil demand, particularly from the Asia Pacific," OPEC stated.

Brent was trading up $1.4 (+2.2 percent) at $62.86/bbl, while WTI rose $1 (+2 percent) to $53.46/bbl at 3.20 pm Riyadh time on Tuesday.   

Write to Parag Deulgaonkar at parag.d@argaamplus.com