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OPEC oil output drops in January on Saudi cut, outages and sanctions

Published 31/01/2019, 12:36
© Reuters. FILE PHOTO: The OPEC logo at the oil producer group's Vienna headquarters
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By Alex Lawler

LONDON (Reuters) - OPEC oil supply has fallen in January by the largest amount in two years, a Reuters survey found, as top exporter Saudi Arabia over-delivered on thye group's supply pact while Iran, Libya and Venezuela registered involuntary declines.

The 14-member Organization of the Petroleum Exporting Countries has pumped 30.98 million barrels per day (bpd) this month, the survey showed on Thursday, down 890,000 bpd from December and the largest month-on-month drop since January 2017.

The survey suggests that Saudi Arabia and its Gulf allies over-delivered on pledged supply curbs to avert the possibility of a new glut building up this year. A formal accord by OPEC and its allies to cut supply in 2019 took effect on Jan. 1.

Crude oil has risen to $62 a barrel after a dip below $50 in December, boosted by the Saudi move, a host of involuntary curbs in other OPEC countries and the prospect of lower supply from Venezuela after U.S. President Donald Trump imposed sanctions on its oil industry.

OPEC, Russia and other non-members -- an alliance known as OPEC+ -- agreed in December to reduce supply by 1.2 million bpd from Jan. 1. OPEC's share of the cut is 800,000 bpd, to be delivered by 11 members -- all except Iran, Libya and Venezuela.

In January the 11 OPEC members bound by the new supply-limiting agreement achieved 70 percent of the pledged cuts, the survey found. Further declines in Iran, Libya and Venezuela boosted the total OPEC decline to 890,000 bpd.

The latest OPEC+ deal came months after they had agreed to pump more oil, which in turn partially unwound the original supply-limiting accord that took effect in 2017.

© Reuters. FILE PHOTO: The OPEC logo at the oil producer group's Vienna headquarters

The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data and information provided by sources at oil companies, OPEC and consulting firms.

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