LONDON • OPEC significantly dialed back its crude oil production in December ahead of an official plan by the cartel to hold back output as part of an effort to rein in global oversupply and bolster crude prices.

In its closely watched monthly oil market report published Thursday, the Organization of the Petroleum Exporting Countries said output declined last month by 751,000 barrels a day to average 31.58 million barrels a day. The drop off was primarily driven by Saudi Arabia — the de facto head of OPEC and the world’s largest exporter of crude — with a reduction of 468,000 barrels a day, according to the cartel.

Iran, whose oil industry is under sanctions by the U.S., Libya and the United Arab Emirates also cut production last month.

The report comes as the cartel, along with Russia and its production allies, began implementing formal cuts at the start of this month as part of a deal reached in early December to collectively hold back output by 1.2 million barrels a day for the first half of 2019. OPEC nations signed on to cut 800,000 barrels a day and the Russia-led group agreed to handle the remaining 400,000 barrels a day.

The announcement of the deal last month failed to bolster prices, which fell by around 40 percent in the fourth quarter from four-year highs reached at the start of October. But the oil market has staged a partial recovery since the start of the year, with prices climbing around 20 percent from annual lows hit in the final week of 2018.

The recent price rise was partly a result of the OPEC-led cuts going into effect, analyst said, as well signals from Saudi Arabia that the kingdom plans to cut its crude exports to around 7.1 million barrels a day by the end of January.

Brent crude, the global oil benchmark, was down 1.1 percent at $60.58 on Thursday.

Total global oil supply fell by 350,000 barrels a day month-on-month in December, to average 100.02 million barrels a day, OPEC said in the report.

OPEC also said Thursday that it expects world oil demand to rise by 1.29 million barrels a day this year, on par with last month’s projection, from an average level of demand of 98.78 million barrels a day in 2018.

Commercial oil stocks in the Organization for Economic Cooperation and Development, a group of industrialized, oil-consuming nations that includes the U.S., fell by 700,000 barrels in November, to stand at 2.871 billion barrels. That’s 23 million barrels above OPEC’s target of the latest five-year average, but 32 million barrels lower year over year.

Cracking towers and chimneys sit in a reflection at the processing plant at the Persian Gulf Star refinery in Bandar Abbas, Iran. 

Bloomberg News