Production from the Organization of Petroleum Exporting Countries sharply rose in January, as buoyant Asian demand was largely met by a revival in Iraqi output and higher output from Saudi Arabia , according to a survey Friday by Dow Jones Newswires.

The news will offer some relief to oil markets after Egyptian disruption fears and concerns about the adequacy of global supply pushed prices above $100 a barrel. Stronger consumption from emerging markets such as India and China has given a boost to OPEC shipments.

The survey, based on input from oil traders, analysts and industry sources, estimates output by all 12 group members rose by 260,000 barrels a day last month to 29.667 million barrels a day.

Markets have been rattled by supply fears as non-OPEC production is expected to broadly stagnate in the coming months and because OPEC, which controls close to 40% of global oil supplies, has so far seen no need to change its formal production ceiling which incorporates production cuts decided in late 2008.

Yet oil production from OPEC's 11 members subject to quotas rose by 110,000 barrels a day in January to a daily 26.997 million barrels a day, the survey shows. The main driver was Saudi Arabia which increased output by 107,000 barrels a day to 8.357 million barrels a day.

Kuwait-based oil analyst Kamel Al-Harami said some OPEC producers were maximizing production to help stabilize rising oil prices. "It is to the advantage of everybody as buyers want a lower price and producers want to sell more," he said.

Roy Mason, head of U.K. tanker tracker Oil Movements, said the majority of the incremental demand came from Asia , notably China , India and Japan --and to a lesser extent from Western markets reinvigorated by the economic recovery. China tripled its diesel imports in December to 460,628 metric tons due to domestic shortages-- the highest level since September 2008. According to the research unit of China National Petroleum Corp., apparent diesel use will rise 6.2% to 164 million tons in 2011.

Against this backdrop of mounting demand, Iraq , which isn't subject to OPEC quota restrictions, has been fast ramping up output amid improving security and deals signed over the last year with international oil giants to develop some of its prized oil fields. Iraqi production rose by about 150,000 barrels a day to average 2.670 million barrels a day of crude production, the survey shows.

Iraqi oil ministry officials said Iraq 's output hike was due to an increase in production in southern oil fields, which are being developed by international oil companies.

The ramp-up could continue this month with the resumption of about 100,000 barrels a day of Iraqi Kurdish exports. They are due to start in the coming days after the resolution of an 18-month dispute, a person familiar with the matter said Tuesday.

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