Saudis order oil cuts to US, Europe before non-OPEC talks

Saudi Arabia - Cuts to Asian refiners would be lower than those to Europe, the United States and to major oil companies.

Saudi Arabia has told its U.S. and European customers it will reduce oil deliveries from January as Russia signaled that a commitment from non-OPEC producers to join OPEC's output limits still faced challenges.
Saudi Arabia told the customers about lower supplies in line with the output reduction agreed by the Organization of the Petroleum Exporting Countries last week, according to a Gulf oil industry source familiar with Saudi oil policy.
"We told our customers of the allocations and the compliance with allocations (for the cuts) for Saudi Arabia is 100 percent," the source said.
He said cuts to Asian refiners would be lower than those to Europe, the United States and to major oil companies.
"We are cutting more in the U.S. because the inventories ... are very high," the source said.
OPEC will meet non-OPEC producing countries in Vienna on Saturday, hoping non-OPEC will commit to cutting 600,000 barrels per day after its own members agreed to cut 1.2 million bpd last week.
OPEC sources said nine non-OPEC countries were set to join the meeting: Azerbaijan, Kazakhstan, Oman, Mexico, Russia, Sudan, South Sudan, Bahrain and Malaysia. Bolivia may also attend the talks, according to an OPEC source.
So far only Russia and Oman have pledged cuts, with one OPEC source saying Mexico could also contribute. In contrast, Kazakhstan plans to boost output in 2017 as it launches the long-delayed Kashagan project.
Russia is expected to shoulder half of the non-OPEC cut, but on Friday Moscow signaled there were snags that needed to be addressed before a deal could be reached.
"Russia sees risks ahead of the deal if questions are not resolved," a Russian government source told Reuters.
"One hundred percent compliance is critical for the deal ... It's essential for non-OPEC to have a responsible approach towards the deal," the source said, adding there was also concern about rising OPEC supplies.
OPEC's second largest producer Iraq has notified U.S. and European buyers of its crude about planned cuts, according to an industry source familiar with the matter.
State-run Kuwait Petroleum Corp (KPC) said it planned to notify its international crude customers soon about reductions to their allocations.
Iraq and Kuwait have committed to cuts to their oil outputs of 210,000 bpd and 131,000 bpd respectively under the OPEC deal.