Oil and Gas

Saudi Arabia to Keep Europe Nov. Crude Supply Steady


Saudi Arabia, the world's top oil exporter, will keep its crude supply steady to Europe in November but is expected to boost shipments to Asia, industry sources said on Wednesday.

An increase in supply would indicate that Saudi Arabia is following through on its pledge to raise crude oil output as of Nov. 1 as part of an OPEC agreement to lift production by 500,000 barrels per day.

Sources at three European oil refiners said they will receive steady supply of Saudi crude in November, while some traders in Asia said they had asked for more but had yet to be informed.

"We are expecting a supply increase for November as OPEC is raising production," said a Singapore-based trader. "They want to sell oil to us because they raised the official selling prices."

Earlier this month, Saudi Arabia cut its November official crude selling prices to Europe and the United States, but raised them for Asian customers. More than half of Saudi Arabia's crude heads to Asia.

Oil traders in Europe said on Tuesday that the prices did not favor European destinations for Saudi crude, making it more likely other regions, such as Asia, would absorb any increase in Saudi supply.

A Beijing-based trading source said Chinese refiners had asked for a sizeable increase in November supplies, partly to compensate for the loss of offshore Abu Dhabi crude during maintenance.

A source at a fourth European oil refiner said its own company had not asked for additional Saudi crude for November and it expected to receive the same volume as in October.

At a meeting last month, Saudi Arabia persuaded fellow members of the Organization of the Petroleum Exporting Countries to raise output in a gesture to consumer nations worried by the impact of record-high prices.

The kingdom has kept exports steady for months in line with OPEC deals agreed last year to trim supply, according to industry sources, with production of around 8.6 million bpd.