OPEC oil output falls in February; Saudi leads supply cuts

OPEC’s oil output decreased by 140,000 barrels per day (bpd) in February to 31.96 million barrels per day (mbd), with output from Saudi Arabia, the United Arab Emirates and Iraq showing the largest declines, the producer group said in its monthly report Tuesday.

The cartel’s output had dropped by 890,000 bpd in January, as its production deal came into effect.

According to secondary sources, Saudi crude production fell to 9.8 million barrels per day (mbd) in February from nearly 9.9 mbd the previous month.

Meanwhile, crude production in Nigeria increased, rising 58,000 bpd to 1.6 mbd in February.

OPEC’s output remains under the 32.5 mbd ceiling set by the group’s production agreement last November, when it pledged to cut supply by a combined 1.2 mbd starting January 2017.

Last week, Kuwaiti oil minister Essam Al-Marzouq said that OPEC members’ compliance rate with production cuts had reached around 140 percent in February.

Oil producers outside the cartel, however, have made between 50 and 60 percent of their targeted cuts, he said. Non-OPEC oil producers, led by Russia, had pledged in December to cut production by a total of 558,000 bpd, as part of efforts to shore up prices and ease a global supply glut.

According to the report, OPEC’s share of total global crude production stood at 33.3 percent last month, 0.1 percent lower from January.

Lower OPEC and non-OPEC production led to a 0.21 mbd decrease in global oil supply in February, to average 95.88 mbd. 

Looking ahead, non-OPEC oil supply is projected to grow by 400,000 bpd to average 57.74 mbd in 2017 – an upward revision of 160,000 bpd, driven by an improving outlook for Canadian oil sands and US supply.

Meanwhile, oil demand growth is anticipated to be around 1.26 mbd – higher by 70,000 bpd from the previous month’s projections – to average 96.31 mbd.

The upward adjustments were due to more optimistic expectations for oil demand in OECD Europe, as well as Asia Pacific, the report said. 

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