Opec’s crude oil production output jumped to an average 29.8 million barrels per day (bpd) in February, as Saudi Arabia continued to boost production, said a report.

This is up 230,000 bpd from an estimated 29.57 million bpd in January, according to a new survey of Opec and oil industry officials and analysts by Platts, a division of McGraw-Hill, and a leading global provider of energy, petrochemicals and metals information.

The increase more than offset the drop in Libyan supplies, estimated to have averaged 190,000 bpd over the month, as the deepening conflict hit the North African country's oil production and exports in the final week of February.

Excluding Iraq, which does not participate in Opec output agreements, the 11 members bound by quotas (Opec-11) pumped an average 27.1 million bpd in February, 190,000 bpd more than January's 26.91 million bpd, the survey showed.

Libyan output is estimated to have dropped to around 1.39 million bpd from January's 1.58 million bpd following the withdrawal of foreign oil company staff and consequent production shut-ins.

The International Energy Agency last Friday estimated that the volume of shut-in production had now reached 1 million bpd.

'The key questions now center on how much more production loss we'll see from Libya for March -- likely to be at least one million barrels per day, if not more -- and Opec's response to that,' said John Kingston, Platts global director of news.

'All signs point to there being a one-for-one substitution so far in terms of barrels, but even so, that doesn't take into account the market impact from a reduction in the quality of those substituted barrels, as well as a fear premium.'

Saudi Arabia boosted production by 300,000 b/d to 8.7 million bpd, nearly 700,000 bpd more than its assumed Opec quota.

Saudi oil minister Ali Naimi told the official Saudi Press Agency on Tuesday that the kingdom had met all incremental demand from its customers and was storing additional quantities of crude at various locations to meet any further call on its production.

Naimi said the kingdom currently had 3.5 million bpd of spare crude production capacity readily available that could help offset any supply shortfall. His remarks suggest that Saudi Arabia, which says it has total production capacity of 12.5 million bpd, has now boosted production to around 9 million bpd.

Platts reported that Saudi Arabia had started to shift barrels of mainly lighter grades from its eastern ports to the Red Sea to position itself for additional shipments into Europe, where most Libyan crude is sold.

Other increases came from the UAE, Iraq, Iran, Kuwait and Ecuador, while Angolan and Nigerian production dipped by 10,000 bpd and 20,000 bpd respectively.

The survey showed that the Opec-11 exceeded their notional 24.845 million bpd output target by 2.255 million bpd, reducing their level of compliance with the 4.2 million bpd of output cuts agreed in late 2008 to 46.3 per cent from 50.8 per cent.

Iraq's 40,000-barrels-per-day increase took its production to 2.7 million bpd in February, a new post-2003 high.

Opec production has been on the increase in recent months alongside rising oil prices, which early this year climbed above $100 per barrel for the first time in two years and continued to climb as political unrest spread across North Africa and the Middle East.

On February 24, North Sea Brent hit a 30-month high of $119.79/ per barrel, but prices have since fallen back to around $114 per barrel for Brent and $105 per barrel for US light crude futures. – TradeArabia News Service