OPEC Output Drops Most in 2 Years

OPEC crude output fell the most in two years last month as the group implemented almost 80% of its new production cuts deal. 
Top exporter Saudi Arabia cut deeper than pledged, while its close allies the United Arab Emirates and Kuwait also made sizable reductions, Bloomberg reported. 
Those deliberate curbs were compounded by involuntary output drops in Iran, targeted by US sanctions, and Libya, both of which were exempt from the group’s agreement.
Output from OPEC’s 14 current members fell by 930,000 bpd last month to 31.02 million bpd, according to a Bloomberg survey of officials, analysts and ship-tracking data. OPEC’s 15th member, Qatar, left the group at the end of December.
OPEC and its allies renewed their production cuts accord in December after a 40% plunge in crude prices, prompted by record American shale flows and doubts about the strength of demand. 
The group, which is known as OPEC+ and includes Russia, agreed to remove 1.2 million bpd from the market, compared to October levels, during the first six months of 2019.
OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members excluding Iran, Libya and Venezuela. Those 11 nations implemented 79% of their pledged cuts in January, the survey found. That means they would need to cut about another 170,000 bpd to fully implement the agreement.
The OPEC+ deal defied US President Donald Trump’s pressure to maintain oil flows and keep prices low. West Texas Intermediate crude futures jumped more than 18% last month, the biggest January gain on record, and traded just below $54 per barrel on Friday.
Saudi Arabia followed through on its pledge to make a quick and early start to the agreement. It cut production by 450,000 bpd from December to reach 10.2 million bpd, about a third deeper than required under the terms of the deal. This is a huge reduction from record output of 11.1 million bpd in November.