OPEC oil supply fell in December by the largest amount in almost two years, a Reuters survey found, as top exporter Saudi Arabia made an early start to a supply-limiting accord while Iran and Libya posted involuntary declines.
The 15-member Organization of the Petroleum Exporting Countries pumped 32.68 million barrels per day last month, the survey on Thursday found, down 460,000 bpd from November and the largest month-on-month drop since January 2017.
The survey suggests Saudi Arabia and some of its allies acted unilaterally to bolster the market as crude prices slid on the possibility of a new glut. A formal accord by OPEC and its allies to cut supply in 2019 took effect only on Tuesday.
Oil LCOc1 has slid to $56 a barrel from a four-year high of $86 in October on signs of excess supply.
While OPEC has not ruled out further action, officials hope prices will be supported by further output declines in January as producers implement the new deal.
“Naturally, it will adjust from now on,” said an OPEC delegate, referring to the downward trend in production. “I hope the market will recover soon.”
OPEC, Russia and other non-members, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd in 2019.
OPEC’s share of that cut is 800,000 bpd.
The deal came just months after an accord to pump more oil, which in turn partially unwound a supply cut that took effect in 2017.
The drop in OPEC output in December is the largest month-on-month decline since January 2017, the first month of the earlier supply-cutting deal, according to Reuters surveys.