TOKYO: Saudi Arabia, the world’s top crude exporter, will supply full contracted volumes of crude oil in July to at least seven Asian term buyers, steady with June levels, industry sources said on Thursday.
Traders in the region had expected full volumes to be supplied for July.
Saudi Arabia has restored full contracted volumes to most Asian buyers since January after curbs for most of 2009 that were put in place to toe the line on OPEC’s record output cuts.
"It was no surprise," said one source at a term buyer who spoke on condition of anonymity, adding that there would be no major impact on the Asian spot crude market.
OPEC announced record output cuts of 4.2 million barrels per day (bpd) in December 2008 in response to an oil market crash.
The US crude oil price tumbled nearly 14 percent in May, the steepest monthly drop in 18 months, after the European debt crisis raised the prospect of reduced fuel demand.
But a Reuters survey last month showed OPEC crude supply has risen in May to the highest in 17 months and left compliance at 51 percent, suggesting the slide in prices has yet to spur closer adherence to agreed output targets.
Saudi Arabia has said it considers prices in the $70-$80 range to be fair for producers and consumers.
Sources said Saudi Arabia made no changes to the operational tolerance level in the supply allocations, meaning buyers have the option of asking for cargoes to be loaded with up to 10 percent more or less crude than contracted volumes.
Two European refiners, including one oil major, will have steady Saudi crude supplies in July compared with June, trade sources said.
Some European oil refiners have stopped buying Saudi Arabia’s medium heavy crude and are buying other grades after supplies were cut in line with OPEC output curbs. –Additional reporting by Judy Hua, Joe Brock and Ikuko Kurahone
