April 4 (Bloomberg) -- The Organization of Petroleum Exporting Countries cut oil production 0.3 percent in March as Nigerian output dropped to the lowest in almost five years, a Bloomberg News survey showed.

OPEC pumped an average 32.35 million barrels a day last month, down 85,000 barrels from February, according to the survey of oil companies, producers and analysts. February output was revised up by 160,000 barrels a day. Production by the 12 members with quotas, all except Iraq, fell 30,000 barrels to 29.97 million barrels a day.

The decline in March was the first monthly drop since August, as producers took advantage of surging prices. Crude oil in New York reached a record $111.80 a barrel on March 17 and closed at $106.23 a barrel today on the New York Mercantile Exchange. Prices are up 65 percent from a year ago.

``Even with this small drop in output there is plenty of crude around,'' said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``OPEC production is well above the call for OPEC crude, so prices should fall in the second quarter.''

Oil demand may decline 1.2 million barrels a day in the second quarter as cold weather ends and a U.S. economic slowdown reduces consumption, OPEC President and Algerian Oil Minister Chakib Khelil said on March 27, according to Algerian news agency APS.

Nigerian Production

Nigerian production fell 80,000 barrels to an average 1.96 million barrels a day last month, the lowest for the West African country since April 2003, the survey showed.

Planned maintenance at Nigeria's offshore Bonga field was largely behind the country's 3.9 percent March output decline. Production at the Royal Dutch Shell Plc-operated 225,000-barrel- a-day Bonga field was off by about 100,000 barrels on average.

Lower Bonga production was partially offset by the resumption of higher oil flows from the Bonny, Forcados and Brass River fields. Attacks on oil installations over the past two years have forced Shell and other companies in Nigeria to cut back production and exports.

Venezuelan oil output slipped 90,000 barrels to an average 2.34 million barrels a day in March because of maintenance work, the survey showed.

Scheduled Maintenance

Scheduled maintenance at the Petrocedeno heavy oil upgrading facility cut output there by an estimated 110,000 barrels day. Located in the country's Orinoco Belt, Petrocedeno, formerly known as Sincor, has 200,000 barrels a day of capacity.

Production rose at the Petro Monagas heavy oil upgrading plant, formerly known as Cerro Negro. Output there increased from 90,000 barrels daily to around 110,000 barrels daily.

Iraqi production dropped 65,000 barrels to an average 2.34 million barrels a day last month because of lower output in the country's northern region, the survey showed.

February production was revised 115,000 barrels a day higher to 2.45 million barrels a day because of higher-than- expected oil use in power plants and at domestic refineries. Bloomberg News calculates Iraqi production estimates based on export flows and domestic oil use.

Iraq exported an average 1.91 million barrels of oil a day in March, down 30,000 barrels from the previous month, the survey showed. The decline in shipments from the northern fields offset an increase in exports from the county's Persian Gulf ports in the south.

Northern Export Route

Exports from Iraq's northern fields to Turkey's Ceyhan export terminal on the Mediterranean Sea fell 70,000 barrels a day to 320,000 barrels a day after a fire on March 11 disrupted oil flows in a pipeline.

Exports from Iraq's two Persian Gulf ports, Basrah and Khor al Amaya, averaged 1.58 million barrels a day in March, up 40,000 barrels from the prior month. Fighting erupted on March 24 between Iraqi forces and militants loyal to Shiite Muslim cleric Moqtada al-Sadr in the nearby city of Basra.

Between 100,000 to 200,000 barrels a day of production is shut following damage caused by explosives and other acts of sabotage. The two main pipelines in the southern pipeline network were unaffected.

Saudi Arabia, OPEC's largest producer and the world's top oil exporter, pumped an average 9.2 million barrels a day in February, unchanged from the prior two months, the survey showed. The Kingdom's oil production is 257,000 barrels a day above its output target.

Iran, the second-biggest OPEC producer, pumped an average 4.02 million barrels a day last month, up 40,000 barrels a day from February. It was the highest output since August 2006. The gain occurred partly because of increased output at the Azadegan field, Iran's biggest oil discovery in three decades.

Angola's Steady Increase

Angola increased production by 70,000 barrels to 1.93 million barrels a day in March, the ninth straight gain. The rise reflects higher production from the country's newest oil field, Mondo.

Angola, which became a member of OPEC last year, was given a daily production target of 1.9 million barrels at the group's meeting on Dec. 5.

``Angolan production will continue to rise a bit,'' Mueller said. ``All of the production cuts were due to physical problems, not a planned response to the market. All in all, these are bearish numbers.''

To contact the reporters on this story: Mark Shenk and Diane Munro in New York at mshenk1@bloomberg.net.

Last Updated: April 4, 2008 16:45 EDT