Mubasher: The Organization of Petroleum Exporting Countries (OPEC) significantly reduced its oil production in January, making good on its agreement to trim output and drain a market glut.
Falling just short of its goal of trimming 812,000 barrels per day (bpd), OPEC crude output dropped by 797,000 bpd month-on-month to average 30.81 million in January, falling from 31.6 million bpd in December, the producer club said in its closely watched monthly oil market report (OMR), citing independent sources.
The largest cuts came from Saudi Arabia, OPEC’s de-facto leader, which pumped about 10.2 million bpd last January, down from 350,000 bpd from the previous month and almost below its official quota as per the output cutting deal.
Saudi Arabia would continue to lower production to around 9.8 million next March, Saudi energy minister Khalid al-Falih told the Financial Times (FT).
The next largest cuts came from the UAE and Kuwait, despite the former’s output came slightly above its quota last month.
Half of OPEC members collectively exceeded their official quotas during the first month of the cut-deal.
Iraq, OPEC’s second largest producer, pumped almost 4.7 million bpd in January, 157,000 bpd above its quota.
OPEC along with a group of 10 allied producers, including Russia, agreed in December to hold back crude supply by a collective 1.2 million bpd for the first half of this year, with the 14-nation group agreeing to remove 800,000 bpd.
By 1:41 pm GMT, US Nymex crude futures climbed 2.19% to $53.67 per barrel (pb), while global benchmark Brent futures rose 2.13% to $62.82 pb.