Libya Orders Oil Cuts of 270K Barrels Per Day

The group has implemented two solid cuts in the last three months. A 1.5 million barrel per day reduction in October failed to halt the slide in crude prices, as did the record reduction in Algeria that was to take effect from Jan. 1. In September, it had implemented so-called paper cuts of 500,000 barrels per day, mainly aimed at ensuring output compliance.

"It's been pretty good. I was surprised," said Conrad Gerber, head of the Geneva, Switzerland-based oil tanker-tracker firm Petro-Logistics SA. "But I think they're living in desperate times and, for once, they're doing what they intended to do. The 1.5 million cut, plus the 500,000 barrel per day cut agreed to in September, seems to have been achieved."

Despite its history of cheating on quotas, analysts say the group appears to be making a sincere bid to curb production as it struggles to engineer a rebound in crude prices.

The United Arab Emirates, OPEC's fourth largest producer, was the first to indicate its compliance with production cuts last week.

The Gulf nation's Abu Dhabi National Oil Co. told customers in letters dated Dec. 25 that it was cutting its main Murban crude allocation by 15% and Upper Zakum crude allowance by 3% in January in accordance with the OPEC cutbacks.

The letters, also provided to The AP, outlined cuts of 10 to 15% of all types of ADNOC crude in February.

On Saturday, Ecuadorean President Rafael Correa said the South American nation would suspend crude production by Italy's Agip and reduce quotas for other companies to comply with new OPEC cuts. Agip produces 28,000 barrels of oil a day from Ecuador's Amazon jungle.