Saudi oil stock to be steady, say sources
Friday, August 10, 2007
SAUDI Arabia, the world's top oil exporter, will keep its crude oil supply curbs steady to customers in Japan and Europe in September from August, industry sources said yesterday.
The steady volume indicates the largest producer in the Organisation of Petroleum Exporting Countries is keeping a lid on output and raises expectations that Opec's September 11 meeting will not alter supply policy.
"With the Opec sound bytes calling for no output change at the next meeting and Saudi Arabia making apparently no changes to the September nominations, a 'no-change' Opec policy will start to be increasingly priced in," said Olivier Jakob, oil analyst at Petromatrix in Switzerland.
In monthly notices, state oil firm Saudi Aramco said it would continue to supply Asian lifters with around 10 per cent less than their full contractual volume, as it has since April, two sources in Japan said.
Sources at three European oil refiners also said supply would be unchanged.
"We're going to have exactly the same. It's been the same for six months, at least in our case," one of the sources said.
More than half of Saudi Arabia's crude heads to Asia. In 2006, Saudi Arabia shipped 51.6 per cent of its almost seven million barrels per day of crude exports to the region.
An industry source in South Korea said the company had not received notices yet but expected steady supplies from August. Saudi Arabia and other Opec members have been lowering output since last year, following deals to remove 1.7 million bpd, or about six per cent of supply, from the market.
Consumer nations, especially the United States, have urged Opec to increase output because of rising prices, which surged to a record high of US$78.77 a barrel last week.
Opec has blamed high oil prices on refinery bottlenecks and political tension, not a lack of crude.
Meanwhile, oil edged below $72 a barrel yesterday as concerns over a slowing US economy overshadowed an unexpectedly steep drop in fuel stocks in the world's top consumer.
Economic worries, the debt market squeeze and falling stock prices have knocked US oil from an all-time high of US$78.77 struck last Wednesday.
Analysts say further declines may be triggered by speculative funds moving out of energy and commodities to cover losses in equities and other markets.
US crude slipped 30 cents to US$71.85, deepening a 27-cent loss on Wednesday. London Brent crude slid 34 cents to US$70.65 after losing 81 cents the day before.Reuters
The steady volume indicates the largest producer in the Organisation of Petroleum Exporting Countries is keeping a lid on output and raises expectations that Opec's September 11 meeting will not alter supply policy.
"With the Opec sound bytes calling for no output change at the next meeting and Saudi Arabia making apparently no changes to the September nominations, a 'no-change' Opec policy will start to be increasingly priced in," said Olivier Jakob, oil analyst at Petromatrix in Switzerland.
In monthly notices, state oil firm Saudi Aramco said it would continue to supply Asian lifters with around 10 per cent less than their full contractual volume, as it has since April, two sources in Japan said.
Sources at three European oil refiners also said supply would be unchanged.
"We're going to have exactly the same. It's been the same for six months, at least in our case," one of the sources said.
More than half of Saudi Arabia's crude heads to Asia. In 2006, Saudi Arabia shipped 51.6 per cent of its almost seven million barrels per day of crude exports to the region.
An industry source in South Korea said the company had not received notices yet but expected steady supplies from August. Saudi Arabia and other Opec members have been lowering output since last year, following deals to remove 1.7 million bpd, or about six per cent of supply, from the market.
Consumer nations, especially the United States, have urged Opec to increase output because of rising prices, which surged to a record high of US$78.77 a barrel last week.
Opec has blamed high oil prices on refinery bottlenecks and political tension, not a lack of crude.
Meanwhile, oil edged below $72 a barrel yesterday as concerns over a slowing US economy overshadowed an unexpectedly steep drop in fuel stocks in the world's top consumer.
Economic worries, the debt market squeeze and falling stock prices have knocked US oil from an all-time high of US$78.77 struck last Wednesday.
Analysts say further declines may be triggered by speculative funds moving out of energy and commodities to cover losses in equities and other markets.
US crude slipped 30 cents to US$71.85, deepening a 27-cent loss on Wednesday. London Brent crude slid 34 cents to US$70.65 after losing 81 cents the day before.Reuters
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