OPEC continues to cut supply
The Organization of Petroleum Exporting Countries announced its February production was down 900,000 barrels per day from January.
The 12 member nations produced about 28.07 million bpd last month, The Guardian reports.
Despite the cartel's production cuts, oil prices have continued their slump. However, OPEC still has about 875,000 barrels to cut before reaching its self-imposed quota.
The only member that does not have to meet the quotas is Iraq, which is working to rebuild its economy through its oil industry.
There was talk of additional cuts leading up to OPEC's most recent meeting Sunday in Vienna, but the cartel decided to focus on compliance instead of additional cuts.
"The deepening economic gloom should, in theory, support the case for a new cut," said John Kingston, Platts global director of oil. "Yet the group has still not managed to reduce output to the target level, though at a compliance rate just short of 80 percent, it's very close."
OPEC and other analysts have said the market is flooded with oil supply, and in order to bring prices back up, the supply must be reduced.
Even as OPEC tries to cut its production, global demand continues to fall at an increasing rate because of the downturn in the economy.
China, Iran sign gas deal
China has signed a $3.2 billion contract allowing it to develop the South Pars field in Iran.
The contract, paid for by three Chinese investment companies, will allow China to explore for natural gas underneath the Persian Gulf seabed, China Knowledge reports.
The gas field is thought to be one of the largest natural gas reservoirs in the world. It is estimated to hold 1.9 quadrillion cubic feet of gas.
Per the agreement, three Chinese firms will invest in the project. It is projected that the annual output of the gas field will hit 10.5 million tons after six years.
China already gets about 13 percent of its oil imports from Iran, amounting to more than $24 billion.
Bids for offshore oil down
With energy prices at record lows, turnout at the most recent U.S. federal sale of offshore oil leases was lower than usual.
The U.S. Minerals Management Service said 56 oil and gas companies submitted 476 bids on 348 fields. The sale attracted $703,048,523 in high bids, according to an MMS news release.
All of the land being leased is under federal waters off the coast of Louisiana, Mississippi and Alabama.
During the previous year's lease sale, 78 companies submitted 1,057 bids on 615 fields, bringing in $3.67 billion.
But oil prices have fallen by more than $100 per barrel since then, and demand is continuing to decrease.
Oil companies are being more cautious about where, when and how much to invest.
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Closing oil prices, March 18, 3 p.m., London
Brent Crude oil: $46.87
West Texas Intermediate crude oil: $47.65
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