Global Oil Supply Update - Feb 3

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On January 31 Reuters reported OPEC oil output plunged in January to a multi-year low as top exporter Saudi Arabia and other Gulf members overdelivered on a new production limiting accord and Libyan supply dropped due to a blockade of ports and oilfields, a Reuters survey found.
On average, the OPEC cartel members produced 28.4 million b/d in January, according to the survey. That is down 640,000 b/d from December's figure. Despite the drop in supply, crude oil prices have slipped to below $60 a barrel on concern that the coronavirus outbreak could cut China's oil demand. This has prompted OPEC and its allies to discuss holding an early meeting and taking further steps to support the market.

Oil output in Libya has plunged since January 18 due to a blockade of ports and fields by groups loyal to eastern based commander Khalifa Haftar. Production in Libya averaged 760,000 b/d during the month, the survey found, down from 1.15 million b/d in December.

On January 28 Reuters reported OPEC wants to extend current oil output cuts until at least June, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of a new coronavirus, OPEC sources said. Saudi Arabia, OPEC's de-facto leader, joined by key oil producers such as the UAE, Algeria and Oman, sought to calm market jitters on Monday, urging caution against gloomy expectations on the impact of the virus on the global economy and oil demand. "A further extension is a strong possibility and a deeper cut is a possibility," said one OPEC source, adding that the impact of the China virus on oil demand would be clearer over the coming week.

On January 27 CNN reported three rockets struck the US Embassy compound in Baghdad on Sunday, leaving one person injured, a US official told CNN.