Platts Survey: OPEC Oil Output Falls in February, But Still Above Target

The 10 members of the Organization of Petroleum Exporting Countries (OPEC) bound by the group's output agreements produced an average 26.62 million barrels of crude oil per day in February, a Platts survey showed March 8. This is down 330,000 barrels per day (b/d) from January's 26.95 million b/d but still well above the group's new 25.8 million b/d production target established last month.

Total OPEC production, including that of Iraq and new member Angola, averaged 30.18 million b/d, up 70,000 b/d from January, the survey showed. Iraq is not bound by OPEC's output agreements and Angola has yet to be assigned a production target.

Among the OPEC-10, Nigeria was the only country not to reduce output. Algeria, Libya, Qatar and the UAE each cut by 10,000 b/d. Indonesia and Venezuela each reduced output by 20,000 b/d. Slightly bigger cuts of 50,000 b/d each came from Iran and Kuwait, while Saudi Arabia sliced 150,000 b/d off January production to produce an average 8.6 million b/d in February.

"OPEC's focus may soon begin to shift toward loosening its hold on supplies toward the third quarter," suggests Platts Director of Oil John Kingston, especially if oil prices stay strong. "With the price of benchmark West Texas Intermediate firmly in the vicinity of $60, it's doubtful that OPEC will seek to significantly tighten the screws on the market." Kingston says it will be particularly interesting to see what Iraq and Angola produce over time.

Iraq, still struggling to rebuild its oil industry after years of UN sanctions and the US-led invasion of 2003, boosted its output to just above 2 million b/d from 1.66 million b/d in January as exports recovered after January disruption.

Angola, which joined OPEC in January, has yet to be asked to limit its oil output. According to survey data, the oil exporter boosted production to 1.55 million b/d in February from 1.5 million b/d in January.

OPEC ministers agreed last October to remove 1.2 million b/d of crude from world oil markets from November, saying supply was well in excess of demand and setting a production target of 26.3 million b/d. In December, they agreed to expand the cut by 500,000 b/d from February. The cuts were based on estimated September production of 27.5 million b/d. The target, as of February 1, is 25.8 million b/d.

The latest survey shows that the OPEC-10 have cut supply by more than 1 million b/d since September, when Platts estimates pegged production at 27.81 million b/d.

	    Country      February   January    December   November   October      Cut
	    Algeria         1.330     1.340       1.350      1.350     1.370    0.084
	    Indonesia       0.840     0.860       0.860      0.860     0.860    0.055
	    Iran            3.800     3.850       3.850      3.850     3.900    0.249
	    Kuwait          2.410     2.460       2.460      2.460     2.530    0.142
	    Libya           1.680     1.690       1.700      1.710     1.730    0.102
	    Nigeria         2.250     2.250       2.230      2.230     2.300    0.142
	    Qatar           0.790     0.800       0.800      0.800     0.830    0.050
	    Saudi Arabia    8.600     8.750       8.790      8.800     9.070    0.538
	    UAE             2.490     2.500       2.500      2.550     2.600    0.143
	    Venezuela       2.430     2.450       2.460      2.460     2.540    0.195
	    OPEC-10        26.620    26.950      27.000     27.070    27.730    1.700
	    Angola          1.550     1.500         N/A        N/A       N/A
	    Iraq            2.010     1.660       1.900      1.990     2.020
	    Total          30.180    30.110      28.900     29.060    29.750