UPDATceE 2-Saudis supply full crude volumes to Asia in May

Published: 07 Apr 2010 21:43:40 PST


*Full May supplies to 7 Asia buyers, steady from April

*A major buyer gets full nominated vols vs 10 pct cut in April

*Operational tolerance policy left unchanged (Adds details)

TOKYO/SINGAPORE, April 8 - Saudi Arabia, the world's top oil exporter, will supply full contracted volumes of crude in May to at least seven Asian term buyers, steady with April levels, industry sources said on Thursday.

A major term buyer will receive full nominated volumes next month after a 10 percent cut on nominated volumes in April, the sources said.

Traders had expected the kingdom to largely provide fully contracted crude supplies for next month at the limited levels that had been agreed in an OPEC agreement, and it has been doing so since January for most of the region.

The sources said there are no changes to the operational tolerance level in the Saudi supply allocations, indicating that buyers can still choose to ask for cargoes to be loaded with up to 10 percent more or less crude than contracted volumes.

Despite no change in full volumes, one buyer would take slightly less medium grade and a little more light grade in May than in April, underscoring the weak market for the two types of crudes, they said.

Middle Eastern heavier crude grades were under pressure on ample supplies and falling fuel oil cracks, which hit a 10-month low of a discount of around $8 a barrel on Thursday.

U.S. benchmark crude prices fell below $86 on Thursday on soaring U.S. crude stockpiles and a stronger dollar, after rallying to an 18-month intraday peak above $87 on Tuesday.

It is also above the $70-$80 range that Saudi Arabia has said it considers reasonable.

Last month, OPEC officials appeared undecided on how to respond if oil prices rose definitively above the $70-80 a barrel range they have praised, highlighting a looming test for the producer group.

The Organization of the Petroleum Exporting Countries has left its output ceiling unchanged for more than a year since announcing a record supply curb of 4.2 million barrels per day (bpd), agreed in December 2008.

However, several OPEC members have relaxed their compliance with production curbs as global oil prices have risen to around $85, more than double the $40 a barrel seen at the start of 2009.

A Reuters survey last month showed that supply from the 11 members of OPEC with output targets, except Iraq, averaged 26.93 million bpd, which implies that just half of promised supply cutbacks agreed in December 2008 were being made.

Production from Saudi Arabia, OPEC's top producer, edged up to 8.2 million bpd in March, more than its implied target of 8.05 million bpd.

Source: http://news.alibaba.com/article/detail/energy/100273802-1-update-2-saudis-supply-full-crude.html

Comments