On the positive side OPEC production (Chart #7) fell in January by 509,000 b/d as they had agreed but the mix was different than expected. Saudi Arabia was expected to cut by 400,000 b/d but increased production by 57,000 b/d to 9.73Mb/d. The reason for the decline was the frightful fall from Libya which saw production decline by 344,000 b/d as the civil war in the country intensified. It has fallen even further recently (Chart #8) to just under 200,000 b/d. This may alone offset recent lowering of China demand but could swing around quickly. As the chart shows a peace deal could swing production up quickly as it did in 2011-2012.