OPEC’s ability to stick with output curbs at 94 pc in February

OPEC has cut its oil output for a second month in February, a survey found on Tuesday, allowing the exporter group to boost already strong compliance with agreed supply curbs on the back of a steep reduction by Saudi Arabia.

The Organization of Petroleum Exporting Countries is cutting its output by about 1.2 million barrels per day (bpd) from January 1 - the first such deal since 2008 to get rid of a glut. Non-OPEC countries pledged to cut about half as much.

Previous OPEC cuts have been mired in mass cheating by its members, making strong compliance by OPEC this time a positive surprise for the market, with prices trading above US$55 per barrel -- up from US$35 a year ago.

Top exporter Saudi Arabia and its Gulf allies are hoping the cuts will help oil rise a bit further to around US$60, five sources from OPEC countries and the oil industry said, to boost exporters’ income and industry investment.

“If compliance is high by OPEC and non-OPEC, then I think prices will reach US$60,” said an OPEC delegate. “If it was higher it would be better, but $60 is fine.”

In January, OPEC delivered 82 per cent of the promised cuts, according to a survey and over 90 per cent according to OPEC’s own report. The International Energy Agency has said it was impressed with OPEC’s compliance, calling it a record level.