Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) fell to 30.45 million barrels per day (b/d) in January from 30.65 million b/d in December, led by a further drop in volumes from Saudi Arabia, a just-released Platts survey of OPEC and oil industry officials and analysts showed.

Saudi Arabia reduced output to 9.25 million b/d in January from 9.45 million b/d in December. The January level was the lowest since an estimated 9.05 million b/d in May 2011.

Lower Saudi output in recent months largely reflected the seasonal reduction in direct burning of crude oil for electricity. The January estimate is down some 750,000 b/d from the recent production peak last August.

“This report is yet another affirmation that Saudi Arabia is willing to narrow what had looked like a big gap between supply and demand almost completely from its own production,” said John Kingston, Platts global director of news. “All data a few months ago was pointing to a gap that looked large; now, it’s a lot smaller. And the biggest factor in closing that gap has been a reduction from Saudi Arabia.”

In mid-January, Ibrahim al-Muhanna, an adviser to Saudi oil minister Ali Naimi, rebutted any suggestion that the kingdom had cut output in order to boost oil prices. Muhanna said Saudi production was being driven primarily by customer needs, including seasonally variable domestic demand which had weakened over the previous quarter from the summer peak.

Other smaller output reductions came from Algeria, Kuwait, Qatar and Libya, the latter affected by a strike at the Zueitina terminal which damped exports. Combined, the total volume of output decreases were 300,000 b/d. However, this was partly offset by production increases totaling 100,000 b/d from Angola, Iraq and Nigeria.

Tags: Platts