Abu Dhabi to keep March contract volumes steady

Abu Dhabi to keep March contract volumes steady
Reuters Published: January 29, 2008, 23:39

Singapore: Abu Dhabi National Oil Co (Adnoc) has notified at least four Asian lifters that it will supply crude oil at full contracted volumes for March, as it did for February, lifters said yesterday.

Abu Dhabi, the main oil producer the UAE, would also supply limited extra volumes, on top of fully contracted volumes, with three refiners saying they did not request additional volumes for March.

Additional cargo

One lifter said they would receive an additional 500,000-barrel cargo of Murban crude for March, while another declined to comment on whether he had sought additional volumes.

Demand for March Abu Dhabi crude has weakened from February as refiners in North Asia have started cutting runs.

The steady March volumes come as the Organisation of Petroleum Exporting Countries (Opec) is scheduled to meet this week, with members repeatedly saying they are pumping enough oil, signalling that it would maintain output levels despite calls by the United States for more supplies to help ease high prices.

International crude prices have come down from their historic high of over $100 a barrel on worries of a US slowdown.

Spot Abu Dhabi crude fell to its deepest discounts in three months last week, with flasgship Murban crude sold at down to a discount of 25 cents a barrel to Adnoc.
But demand has not collapsed and spot cargoes for March loading have largely cleared by now, traders said, suggesting that refiners saw value in the light sour grades, though at discounts to their official selling prices (OSPs).

Japanese refiners, who are the largest buyers of Abu Dhabi crude, have cut runs for January and February from their initial plans on sluggish domestic demand and falling margins.

Japan's top refinering company, Nippon Oil Corp, has also said that it will extend and deepen a 30,000 barrels per day (bpd) production curb this month to a 41,000-bpd cut in February.

Four out of five South Korean refiners have also decided to cut crude runs for February, pressured by poor margins and seasonally weak demand, processing at the lowest rate in four months, a Reuters poll of industry sources show-ed.