OPEC output drops 170,000 BPD in February: Survey

OPEC's eleven members, including Iraq, pumped an average 27.93 million barrels per day (MMBPD) of crude in February, down 170,000 BPD from January's 28.10-MMBPD, a Platts survey of OPEC and oil industry officials showed March 11.

Excluding Iraq, which does not participate in OPEC output accords, the ten members with output quotas produced an average 26.03-MMBPD, down 120,000 BPD from January's 26.15-MMBPD. But despite the downward drift in output, the OPEC-10 were still more than 1.5-MMBPD above their current 24.5-MMBPD ceiling and more than 2.5-MMBPD above the 23.5-MMBPD ceiling which is scheduled to come into effect at the beginning of April.

The cartel decided at a February 10 meeting in Algiers to cut quotas by 1-MMBPD from April 1. But with world crude benchmarks close to levels seen ahead of the US-led war on Iraq, there is little expectation that OPEC will reduce actual output over the next few weeks to anywhere near the new official ceiling, despite the group's apparent determination to implement the cut at least nominally.

"There had been some speculation that given high prices, OPEC members might not actually implement the cuts in April, giving some relief to consumers," said John Kingston, global director of oil at Platts. "But the Saudis have signalled clearly that they will cut 5-6%, on average, as of April 1, so we can expect to see these latest numbers down further in the next two months."

"Another factor OPEC will be looking at closely will be the return of some exports of Iraqi crude from the Turkish port of Ceyhan and the return of export operations at Khor al-Amaya," Kingston said.

OPEC's own crude basket stood at $31.67per barrel March 10, its 67th straight trading day above the cartel's $22-28per barrel target band.

A senior OPEC delegate March 10 reiterated the cartel's determination to go ahead with the April 1 cut, citing members' concern to avoid a larger than normal stock build in the second quarter, but at the same time insisting that if circumstances changed -- either because of higher demand or disruption to supply -- OPEC would ensure the market was provided for.

Saudi Arabia, meanwhile, was one of six OPEC members to reduce output from January levels, the survey showed, but its 8.45-MMBPD February average left it nearly 500,000 BPD above its current 7.963-MMBPD quota. Furthermore, the Kingdom's volume allocations for April, reported by customers March 8 and March 9, suggested that OPEC's top producer was not planning to cut output to anywhere near its new April 1 quota of 7.638-MMBPD, analysts said. In order to meet its new quota, Riyadh would need to slash output by more than 800,000 BPD.

Output decreases totalling 220,000 BPD were partially offset by 50,000 BPD in combined increases from Iran, Libya and Nigeria. Only Venezuela and Indonesia produced within quota, with Venezuela under-producing its 2.819-MMBPD quota by close to 280,000 BPD. (*)

Country-by-country breakdown of production with figures in millions of b/d:
Country	Feb 04	Jan 04	Dec 03	Nov 03	Quota
Algeria	1.150	1.170	1.170	1.170	0.782
Indonesia	0.990	0.990	1.000	1.010	1.270
Iran	3.920	3.900	3.850	3.810	3.597
Iraq	1.900	1.950	1.900	1.890	N/A
Kuwait	2.210	2.230	2.170	2.170	1.966
Libya	1.460	1.440	1.420	1.430	1.312
Nigeria	2.340	2.330	2.290	2.240	2.018
Qatar	0.750	0.750	0.730	0.740	0.635
Saudi Arabia	8.450	8.530	8.450	8.310	7.963
UAE	2.220	2.250	2.220	2.170	2.138
Venezuela	2.540	2.560	2.550	2.580	2.819
Total	27.930	28.100	27.520	27.520	N/A
OPEC 10 (excluding Iraq)	26.030	26.150	25.850	25.630	24.500