OPEC Cuts Begin: UAE’s Oil Firm to cut january Deliveries
In a initial visible sign that at least some opec cuts are underway, abu dhabi National oil company (ADNOC) has said that it'll reduce crude oil provides, and though the move is expected to hit Asia, it's not viewed as seriously affecting the Asian market as a result of cuts are within the tolerance limits of the contracts.
ADNOC said on tuesday that it'd cut deliveries by 3 to 5 % for 3 export grades, Reuters reports, quoting a company notice to traders. The UAE company plans to cut provides of the Murban and upper Zakum grades by 5 %, and therefore the Das grade crude oil provides by 3 %.
“In line with OPEC's latest decision to cut production, we regret to advise you that crude oil allocation for the month of january 2017 are reduced,” ADNOC said, as quoted by Reuters.
According to traders, the cut is manageable, and saudi arabian and Iraqi provides can cover ADNOC’c cuts in january.
“I think it's manageable. several (refiners) received incremental Arab extra light in january to hide,” an official at a North Asian refinery told Reuters.
Under the opec deal from november 30, UAE pledges to cut 139,000 bpd from a reference production level of 3.013 million bpd.
A Reuters survey has shown that ADNOC’s output reached a record 3.1 million bpd last month.
Another provider from the Gulf Arab states, Kuwait petroleum Corporation (KPC), is also preparing to implement the cuts, and per refining sources quoted by Reuters, KPC “will implement its share of the reduction, that shall take effect january 2017”.
In OPEC’s output cut deal, Kuwait is committing to cut 131,000 bpd from a reference production level of 2.838 million bpd.
Oman, a member of the Gulf Cooperation Council (GCC) however not of opec, was expected to notify customers today that it planned to cut production by 45,000 bpd. per a Reuters source, oman – that is a component of the cluster of non-OPEC producers that agreed to a collective 558,000-bpd cut – would notify each of its customers on the specifics later.