OPEC Production Rose Last Month as Libya Continued Comeback

OPEC’s production rose for a third month in December as a continued cease-fire in crisis-torn Libya enabled it to restore more supplies. While the group’s dominant producer, Saudi Arabia, startled oil markets on Tuesday with a pledge to slash 1 million barrels a day next month, the current trend in OPEC output is upwards. The Organization of Petroleum Exporting Countries increased supply by 190,000 barrels a day in December to 25.45 million a day, according to a Bloomberg survey.

It’s based on ship-tracking data, information from officials, and estimates from consultants including Rystad Energy AS, JBC Energy GmbH and Petro-Logistics SA. Libyan output has increased roughly ten-fold since September, amid a tentative peace accord between rival factions jostling for control of the country. Exports have resumed following a decision by military leader Khalifa Haftar to allow shipments from the terminals he controls.

OPEC+, a 23-nation alliance that includes non-members like Russia and Kazakhstan, agreed to revive 500,000 barrels a day in January as world demand gradually improves. The coalition is currently halting 7.2 million barrels a day, or about 7% of global supplies. But in February, the alliance’s output should fall steeply.

While most OPEC+ nations will keep supplies steady next month, the Saudis have promised a unilateral cutback intended to accelerate the re-balancing of the market.

Oil demand remains vulnerable as a more infectious strain of the virus triggers renewed lockdowns in Europe, and inventories are far above average levels because of the demand slump last year.

The kingdom, which the survey showed pumped 9 million barrels a day last month, will throttle back to about 8.1 million at the start of February and hold there until the end of March, Energy Minister Prince Abdulaziz bin Salman announced on Tuesday. Crude prices rallied on the pledge, and traded near $54 a barrel in London on Wednesday.