Libya Orders Oil Cuts of 270K Barrels Per Day

So far, the brunt of the cuts have been borne by OPEC heavy hitters Saudi Arabia, Kuwait and the UAE. Gerber said that the current level is at least partly linked to the inability of some other members like Venezuela and Nigeria to even meet their allocations.

Saudi output was down about 1 million barrels between October and December, he said, and the kingdom -- the only OPEC member with significant spare production capacity -- was expected to cut another 300,000 barrels per day in December, bringing it down to 8.2 million barrels a day, he said.

Gerber said Venezuela's production is closer to 2.3 million barrels per day, well below the 3.1 million barrels the country says it is producing.

Similarly, Nigeria was producing about 100,000 barrels per day under its 2.05 million barrel target, he said, noting that this was linked to political instability and rebel attacks in the African country that have repeatedly undercut production efforts.

Venezuela and Iran are known as the price hawks in the group, and are traditionally the least likely to comply with output cuts as they depend heavily on oil revenue. Venezuela also needs high oil prices for its heavier oil projects to be economically feasible, analysts say.

Saudi Arabia has "really come down heavily," said Gerber. "It remains to be seen where they go from there. They've got to be convinced, first, that everybody else is going along. They've seen this before -- where they've done the cutting and others have done the cheating."

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AP Business Writers Tarek El-Tablawy in Cairo, Egypt, and Adam Schreck in Dubai, UAE, contributed to this report.

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