Oil prices rallied as OPEC crude output fell by 280,000 barrels per day (bpd) in February, according to a Reuters survey. The main reason is an involuntary disruption of supplies from a pipeline in Iraqi Kurdistan that was recently pumping about 600,000 bpd.
The pipeline has been offline since February 17 and could stay closed until mid-March.
The cut in supply bolstered oil prices with the US crude benchmark West Texas Intermediate gaining over 11 percent since February 17 to over $34 per barrel. Brent crude gained over six percent in the same period, trading at nearly $37 per barrel.
"The interruption from Kurdistan is significant because they were a big part of the increase in exports from Iraq. It is prompt supplies and these are large volumes,” Olivier Jakob, analyst at Petromatrix told Reuters.
A spill in Nigeria and field maintenance in the United Arab Emirates has also curbed OPEC output.
However, Iran has boosted supply by 200,000 bpd since December, according to Reuters. Tehran says these figures are much higher at 500,000 bpd.
According to the survey, Saudi Arabia’s output stood at 10.20 million bpd, unaltered since January, but down from a record-high of 10.56 million bpd in June.
Currently, OPEC has no official supply target, after scrapping the output ceiling of 30 million bpd at the December meeting. The cartel had been exceeding its quota for months.
After oil prices hit 12-year lows of $27 per barrel in January, the world’s two biggest oil producers – Russia and Saudi Arabia as well as OPEC members Qatar and Venezuela agreed on an oil production freeze at January levels. This was the first crude production accord since 2001.
Ecuador, Algeria, Nigeria, Oman, Kuwait, the United Arab Emirates have said they are ready to join the pact. Iran and Iraq say they only support steps to improve the situation in the oil market, avoiding promises to join the production freeze.