OPEC’s Oil Output Fell 2.7% in February, Survey Shows

March 3 (Bloomberg) -- OPEC, which pumps more than 40 percent of the world’s oil, cut output for a seventh consecutive month in February as producers tried to stem price declines, a Bloomberg News survey showed.

Production from the 12-member group averaged 27.775 million barrels a day, down 770,000, or 2.7 percent, from January, according to the survey of oil companies, producers and analysts. Output in January was revised 20,000 barrels a day lower.

Cuts were led by Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, which reduced output by 165,000 barrels to an average 7.86 million barrels a day. It was the first time Saudi production dropped below 8 million barrels a day since November 2002.

“They’ve definitely done more than I thought they would have, but on the flip side of that, there’s a lot of spare capacity to meet any sort of disruptions, and that’s one reason why a sustained rally isn’t likely,” said Kyle Cooper, an analyst at IAF Advisors, an energy consultant in Houston.

Oil futures for April delivery rose $1.50, or 3.7 percent, to $41.65 a barrel at 2:45 p.m. today on the New York Mercantile Exchange after dropping 10 percent yesterday. Crude has fallen 72 percent since reaching a record $147.27 a barrel on July 11.

Production cuts have left OPEC with 6.725 million barrels a day of spare capacity, including an estimated 2.94 million barrels in Saudi Arabia, the survey showed.

Spare Capacity

Being able to raise production if needed “works to substantially reduce the fear premium that was prevalent in the 2003 to 2008 run-up” in oil prices, Cooper said. “Clearly, they’ve got a lot of spare capacity, which they can bring on very quickly.”

OPEC members with output quotas, all except Iraq, pumped 25.390 million barrels a day in February, 545,000 barrels more than their target of 24.845 million. The figure was 790,000 barrels a day below a revised January production level of 26.18 million barrels a day.

Only Saudi Arabia, Kuwait, the United Arab Emirates and Qatar producing less than their targets last month, the survey showed.

OPEC oil ministers agreed Dec. 17 in Oran, Algeria, to reduce supply by 9 percent as crude-oil prices headed for their first annual decline since 2001.

Iranian Output

Iraq pumped 2.385 million barrels a day last month, 20,000 barrels a day more than in January. Iraq was the only OPEC member to increase output.

Iran, OPEC’s second-biggest producer, cut output by 90,000 barrels to 3.69 million barrels a day. The country exceeded its output target by 354,000 barrels, the most of any OPEC member.

Kuwait cut output by 140,000 barrels to 2.14 million barrels a day, the second-biggest reduction, after Saudi Arabia.

Venezuelan oil output slipped 85,000 barrels to an average 2.065 million barrels a day in February, 79,000 barrels a day above its target.

Nigerian production fell 45,000 barrels a day to an average 1.765 million barrels a day, 92,000 barrels a day above its target.

Angola pumped 1.67 million barrels a day last month, down 70,000 from January and 153,000 barrels above its production target, making its compliance the second-worst after Iran in terms of actual barrels.

Libyan output lost 25,000 barrels a day to 1.605 million, 136,000 barrels a day over its target.

Algeria produced 1.245 million barrels, down 30,000 barrels from January and 42,000 barrels over its target. Qatar’s production dropped 30,000 barrels to an average 695,000 barrels a day, 36,000 barrels a day under its target. Ecuador produced 445,000 barrels a day, down 30,000 barrels from January and 11,000 barrels over its target.