Oil Rebounds Above $60 Ahead Of OPEC+ Meeting (After February Production Plunge)

Oil prices are rebounding this morning on the back of a reported plunge in OPEC+ production in February, after tumbling yesterday on virus-variant fears and OPEC+ production plan anxiety.

As OilPrice.com's Irina Slav reportsSaudi Arabia’s unilateral additional cut in oil production sent the total OPEC output down by 870,000 barrels per day (bpd) in February, the first monthly drop in the cartel’s production since June last year, the monthly Reuters poll showed on Monday.

The total crude oil production from all 13 OPEC members stood at 24.89 million bpd last month, with Saudi Arabia achieving around 850,000 bpd of its pledged 1-million-bpd cut beyond its OPEC+ quota, according to the Reuters survey of OPEC sources, sources at oil firms, and tanker-tracking data. 

In January 2021, according to OPEC’s secondary sources, the cartel’s oil production averaged 25.50 million bpd, up by 180,000 bpd from December, with output rising in top producer Saudi Arabia, as well as in Venezuela and Iran, which are exempt from the OPEC+ cuts.

In February, however, the first of two months in which Saudi Arabia is cutting an additional 1 million bpd, total production declined thanks to this cut, and to lower exports from Angola and Libya, the Reuters survey found. Iran, which like Libya is exempt from the cuts, saw its supply also drop in February.

In Libya, oil loadings at export terminals were disrupted last month, after members of the Petroleum Facilities Guard stopped vessels from loading crude amid a strike over delayed salary payments.

Nigeria, Africa’s top oil producer and an OPEC member that has struggled with compliance with the cuts, saw its production rise by 100,000 bpd after

ExxonMobil lifted a more than a month-long force majeure on the Qua Iboe crude oil export terminal at the end of January. 

OPEC and its non-OPEC allies led by Russia are meeting later this week to decide how to proceed with the collective production cuts from April onwards. Given the recent rally in oil prices, analysts expect the group to lift production in some form and the Saudis to reverse their unilateral 1-million-bpd cut.

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