OPEC Oil Output Slips From Record in February, Survey Shows

(Bloomberg) —

OPEC crude production slipped in February from the highest level in Bloomberg data going back 20 years.

The Organization of Petroleum Exporting Countries reduced production by 79,000 barrels to 33.06 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Nigeria and Iraq led declines, while Iranian production climbed to the highest level in more than three years.

OPEC set aside its output target of 30 million barrels a day at its Dec. 4 meeting in Vienna. Saudi Arabia, the world’s largest crude exporter, has led the group in fighting for market share against higher-cost producers such as shale drillers in the United States.

“I wouldn’t read too much into the decline because Iraqi production is volatile, and the same goes for Nigeria,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Nigeria’s production fell 139,000 barrels a day to 1.889 million, the biggest decline in the survey. Nigerian output is volatile because of political unrest and theft in the Niger River delta, the main oil-producing region.

Iraqi production dropped by 125,000 barrels a day to 4.385 million this month, according to the survey. OPEC’s second-biggest producer pumped 4.51 million barrels a day in January, the highest level in monthly data compiled by Bloomberg going back to 1989.

Iranian output rose by 140,000 barrels a day to 3 million, the most since July 2012 when sanctions against the nation were strengthened. The Islamic republic is seeking to regain market share after sanctions were removed last month upon completion of an agreement limiting its nuclear program.

Saudi Arabia, OPEC’s top producer, pumped 10.2 million barrels a day for a second month, in anticipation of a deal with Russia and other producers to freeze output. Saudi Arabia, Russia, Venezuela and Qatar tentatively agreed on Feb. 16 to cap production at January levels.

The desert kingdom won’t cut oil production as other countries would be unlikely to assist in restraining output, Petroleum Minister Ali Al-Naimi said at the IHS CERAWeek energy conference in Houston last week, leaving the burden of balancing supply with high-cost producers.

To Read The Full Story

Are you already a subscriber?
Click to log in!