OPEC crude output rose for the first time in six months as rising Libyan production outpaced a cut by Saudi Arabia, which has implemented a program aimed at curbing excess supply and supporting prices, a Bloomberg survey showed.
Output in the 12-member Organization of Petroleum Exporting Countries increased 97,000 barrels, or 0.3%, to an average 30.699 million barrels a day this month from a revised 30.602 million in January, the survey of oil companies, producers and analysts showed. The January total was revised 123,000 barrels a day higher, mostly because of a change to the Kuwaiti production estimate.
Brent crude for April settlement was up 6 cents to $111.93 a barrel on the London-based ICE Futures Europe exchange at 1:49 p.m. New York time. Brent is the benchmark contract for more than half the world’s oil. West Texas Intermediate oil for April delivery fell 34 cents to $92.42 a barrel on the New York Mercantile Exchange.
“The most interesting point is that the Saudis are sticking to their line,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “They’ve reduced production from nearly 10 million barrels in less than a year. This shows their intention to do what it takes to keep prices at a level they are comfortable with.”
Saudi Arabia, OPEC’s biggest oil producer, pumped 9 million barrels a day this month, the lowest level since May 2011. Output was down 100,000 barrels a day from January and 900,000 barrels from May, when production reached the highest level since at least January 1989.
The desert kingdom denied last month what it said were suggestions that it cut oil production to push prices higher and attributed the reduction to weaker demand, according to Ibrahim Al-Muhanna, an adviser to Oil Minister Ali al-Naimi. Consumption fell in Saudi Arabia after peaking in the summer, Muhanna said. Overseas demand also dropped because of slower euro-area growth and concerns about budgetary challenges in the U.S., he said.
“The Saudis have done what they needed to do to eliminate a glut of crude in the market,” Emerson said. “Brent is safely above $100 a barrel so they can stop cutting back. They will probably increase production in the second quarter.”
Libyan output increased 130,000 barrels to 1.24 million this month, the biggest gain of any member, the report showed. Production rose because of the reopening of the country’s Zueitina export terminal early this month.