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Saudi keeps June oil supply curbs to Asia, Europe

The steady volume indicates that the kingdom, the largest producer in OPEC, is still keeping a lid on supply, following deals with other member countries to trim supply by 1.7 million barrels per day.

“There are no changes,” a source at a European buyer of Saudi crude said. “Our volume is in line with the other months.”

Four European refiners said supply would be unchanged.

Japanese and South Korean sources said Saudi Arabia will supply crude at 9.5 percent to 10 percent below contracted volumes in June, steady from May.

“There is about a 10 percent cut, and that is the same as the past several months,” one of the sources in Asia said.

Saudi Arabia sells about half of its 7 million bpd of oil exports to Asia, including Japan, which buys about 1.1 million barrels of oil from the kingdom every day.

The Organization of the Petroleum Exporting Countries (OPEC) is under pressure from consumers to reverse the supply curbs agreed last year that have helped lift the price of Brent crude to above $67 a barrel from about $50 in January.

But analysts expect the group, which pumps more than a third of the world’s oil and holds its next scheduled meeting in September, to remain cautious about opening the taps.

“Most likely, OPEC will continue to be very careful about production volumes until the next meeting because the market focus is low gasoline inventory levels in the United States,” said Tony Nunan of Mitsubishi Corp. “Saudi Arabia’s crude does not change that.”

Brent crude rose 48 cents at $67.31 a barrel by 0957 GMT. Gasoline was little changed at $2.3540 a gallon.

Last week, the International Energy Agency, an adviser to 26 industrialised countries, called on OPEC to raise output before the summer to prevent a sharp decline in consumer nations’ stocks.

The IEA said fuel inventories in developed countries fell by 900,000 bpd during the past six months, a decline the Paris-based watchdog described as unusually high.

While noting the constraints on gasoline, OPEC oil ministers continue to dismiss calls to pump more crude. They insist they are supplying enough to satisfy the 85.5 million bpd oil market.

Some analysts have pointed out signs of increases in OPEC supplies.

Roy Mason of consultancy Oil Movements said last week that OPEC oil exports, excluding new member Angola, will jump 260,000 barrels per day (bpd) in the four weeks to May 24 on rising Asian demand.