The world’s top oil exporter and Opec leader will supply full contracted volumes of crude oil in October to at least three major Asian term buyers, steady from September.
The term supply volumes to key European buyers would be the same as September, the sources said.
“It is same as last month. It is in line with contract, nothing more, nothing less,” one source in Europe said.
Saudi Arabia notifies its term customers of the supply volumes in the following month and this is often used by the oil industry as a key indicator for a next move by the Opec.
Saudi Arabia produced 9.76mn bpd of oil last month, up from 9.60 bpd in July, a senior Gulf Opec delegate said yesterday.
Saudi Oil Minister Ali al-Naimi said in early June the kingdom would produce all the oil needed after Opec talks over a coordinated output increase to make up for the shutdown of Libyan oil fields collapsed in Vienna.
Saudi Arabia over the summer offered additional supplies to Asian refiners, aiming to cool down oil prices. Refiners took full nominated volumes but most refrained from asking for extra supplies.
There was no change to the operational tolerance in the October supply allocation, the sources said. Buyers have the option of asking for cargoes of up to 10% more or less crude than contracted.
Abu Dhabi National Oil Co (Adnoc), the main exporter for Opec member the UAE, two weeks ago said it will supply Murban crude at 5% below contracted volumes in October, unchanged from September.
Demand for Middle East crude from buyers in northeast Asia has been robust over the past month as refiners stock up ahead of the northern hemisphere winter, keeping margins at profitable levels.
Asian refiners were not put off by a larger-than-expected increase in the official selling price (OSP) of Saudi Arab Light last week, which reflected higher spot prices for October-loading cargoes for most Middle East grades, traders said.
Some Libyan oil fields restarted production this week after months of inactivity during the civil war. But Libyan exports are expected to take time to return to pre-war levels and the world’s biggest oil exporter has not yet decided whether to alter its production, a senior Opec delegate said yesterday.
“It’s too early to say how production will be affected. On many occasions countries like Kuwait and Venezuela have restarted their production without disturbance to the market,” he said.
“As far as I can tell, Libya’s production will come back gradually. If the market needs more supply we will step in… We still don’t know what will happen, but demand might pick up during the fourth quarter as the winter starts.”
Opec yesterday cut its forecast for global oil demand growth next year because of a worsening economic outlook.
Gulf Opec members the UAE and Kuwait August production was 2.6mn bpd and 2.8mn bpd respectively.
