OPEC oil output dropped in February as a voluntary cut by Saudi Arabia added to reductions under a supply limiting agreement, a Reuters survey found, ending a run of seven consecutive monthly declines, APA reports citing Reuters.
The 13-member Organization of the Petroleum Exporting Countries pumped 24.89 million barrels per day (bpd) in February, the survey found, down 870,000 bpd from January. This is the first monthly decline since June 2020.
OPEC and allies, known as OPEC+, decided to keep supply mostly steady for February and Saudi Arabia made an extra cut on concern of a slow demand recovery. With oil rising to a 13-month high last week, OPEC+ is set to discuss pumping more at a meeting on Thursday.
“So far, the members of the alliance have been cooperating and implementing the cuts in exemplary fashion,” said analyst Eugen Weinberg of Commerzbank.
“We believe that the high prices will prompt OPEC+ to step up its production by 500,000 barrels per day, while at the same time withdrawing Saudi Arabia’s additional production cut.”
In February, the biggest supply cut came from top exporter Saudi Arabia, which pledged a 1 million bpd output reduction for February and March to ensure inventories do not build up.
Riyadh made about 850,000 bpd of the reduction, according to the survey. Consultants including PetroLogistics, which tracks tanker shipments, said Saudi exports remained higher than expected last month.
The Saudi move means OPEC is pumping much less than called for by the OPEC+ deal. Compliance with pledged cuts in February was 121%, the survey found, up from 103% in January.