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Global Oil Production Fell in February on OPEC Cuts, Venezuela Outages -IEA

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03/15/2019 | 10:14 am

By Christopher Alessi

LONDON--The world's oil production continued to fall in February, largely on the back of OPEC-led supply cuts and outages in Venezuela, the International Energy Agency said Friday.

In its closely watched monthly oil-market report, the IEA said global oil output declined by 340,000 barrels a day in February, month-on-month, to stand at 99.7 million barrels a day. However, the figure was still up by 1.5 million barrels a day compared with the same month a year prior, the agency said.

Last month's declines were led by reduced crude oil output in the Organization of the Petroleum Exporting Countries--both voluntary and involuntary--of 240,000 barrels a day. That brought the cartel's February production down to 30.68 million barrels day, its lowest level in four years.

Saudi Arabia--the de facto head of OPEC and the world's largest exporter of crude--continued to lead the way in cutting its crude production as part of a coordinated effort by the cartel and its production allies to mop up excess global supply and rebalance the market.

Output in Saudi Arabia came down by 100,000 barrels a day last month, to 10.14 million barrels a day, the IEA said. The report said total Saudi crude output has fallen by 920,000 barrels a day from record highs in November.

OPEC and a group of 10 producers outside the cartel, led by Russia, agreed late last year to collectively reduce oil output by 1.2 million barrels a day from October 2018 levels, for the first half of this year.

But OPEC's output in February also tumbled as a result of outages in Venezuela--an OPEC member exempt from the most recent production-cut agreement--due to U.S. sanctions on the country's oil industry. Crude output in Venezuela, which is in the throes of a political and economic crisis, fell by 100,000 barrels a day last month to 1.14 million barrels a day, down 410,000 barrels a day year-on-year.

OPEC on Thursday released its own monthly oil-market report, which showed the cartel's output had fallen by 221,000 barrels a day in February, citing similar declines in Venezuela and Saudi Arabia.

Meanwhile, the IEA said global oil demand had slowed sharply in the fourth quarter of last year, as a result of weaker appetite in the Organization for Economic Cooperation and Development--a group of industrialized, oil-consuming nations that includes the U.S.

But as a result of strong demand growth outside the OECD, the agency kept its overall estimate for oil-demand growth for 2018 unchanged at 1.3 million barrels a day, and maintained its demand growth forecast for 2019 at 1.4 million barrels a day.

Write to Christopher Alessi at christopher.alessi@wsj.com

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