The Abu Dhabi National Oil Company (ADNOC) will cut exports by a further percentage point in August, as it continues to co-operate with OPEC's plan to mop up excess crude stockpiles overhanging the international oil market. ADNOC said it would reduce August shipments of all four of its export grades of crude to 19 per cent below the volumes it supplied late last year "in accordance with OPEC's decision to reduce production". That deepens an 18 per cent cut announced for July.
"We trust you will make every effort to co-operate with us," the company said in a statement to its customers, which are mainly Japanese and Korean refineries. The UAE's August export cut, which is thought to be its deepest ever, signals the country's resolve to continue playing its part in tightening oil supplies in a glutted market, amid concerns that other OPEC members may be relaxing their efforts to comply with a series of deep cuts to the group's production target announced late last year.
The oil exporters' group that controls about 40 per cent of world crude supplies is aiming to reduce output by 4.2 million barrels per day (bpd), or roughly 5 per cent of global supply, in an effort to stabilise oil markets after the price of crude tumbled from a record US$147 per barrel last July. Yesterday, crude was priced at about $70 a barrel in New York. OPEC left its production target unchanged at its two meetings so far this year, in March and late last month, even as global oil demand continued to soften.
The UAE, which is OPEC's third-largest exporter, has been pumping oil at about 2.2 million bpd, according to recent surveys. The crude grades affected by the ADNOC announcement are Murban, Lower Zakum, Umm Shaif and Upper Zakum. @Email:email@example.com IEA cuts five-year oil demand forecast, b4