OPEC cuts oil output

OPEC cut output by 840,000 barrels a day last month, but has more work to do to fully comply with last year’s historic production deal.

The Organization of Petroleum Exporting Countries pumped 32.3 million barrels a day in January, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. The 10 members of the group that pledged to make cuts in Vienna two months ago implemented 83 percent of those reductions on average, but their efforts were offset by increases from Iran, Nigeria and Libya that were permitted under the terms of the agreement.

Accounting for the members who raised output and the suspension of Indonesia, OPEC’s total output remains 550,000 barrels a day above the target set out in the Nov. 30 deal. That means the group as a whole is only about 60 percent of the way toward the production level it deems necessary to eliminate a global oversupply and boost prices.

Oil has fluctuated above $50 a barrel since OPEC joined with 11 nonmembers in December to trim supply by as much as 1.8 million barrels a day. While Middle Eastern producers from Saudi Arabia to Iraq have implemented cuts and Russia says it’s ahead of schedule with its own reduction, wary investors are also considering signs that U.S. drillers are taking advantage of higher prices to stage a comeback.

Saudi Arabia, OPEC’s largest producer, led the January cuts with a reduction of half a million barrels a day, going below 10 million for the first time in almost two years. Its allies the United Arab Emirates and Kuwait followed by cutting a combined 310,000 barrels a day.