OPEC oil output falls in February on Saudi additional cut

OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to agreed reductions under a pact with allies, a Reuters survey found, ending a run of seven consecutive monthly increases.

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 while Saudi Arabia made an extra cut out of concern about a slow recovery in demand.

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 at 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.”

Top exporter Saudi Arabia pledged an additional 1 million bpd output cut for February and March to ensure inventories do not build up.

Riyadh achieved about 850,000 bpd of that reduction in February, the Reuters survey found.

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 under the OPEC+ deal - the supplier group’s pact with non-OPEC producers.

Compliance with pledged cuts in February was 121%, the survey found, up from 103% in January.