SINGAPORE Dec 13 Oil prices were firm on
Tuesday as the first signs of a crude production cut organised
by OPEC and other exporters materialised, tightening a market
that has been grappling with ballooning oversupply for over two
Brent crude futures, the international benchmark for
oil prices, were trading at $55.76 per barrel at 0211 GMT, up 7
cents from their last settlement.
U.S. West Texas Intermediate (WTI) crude futures were
weaker, down 7 cents at $52.76 a barrel, as American producers
did not participate in the cut.
The firmer Brent prices came after oil markets shot to
mid-2015 highs earlier this week after the Middle East-led
Organization of Petroleum Exporting Countries (OPEC) and other
exporters led by Russia over the weekend reached their first
deal since 2001 to cut output by almost 1.8 million barrels per
day to reduce in oversupply and prop up prices.
Analysts said that the announced cuts had surprised many as
several OPEC members were previously reluctant to participate in
"The increasingly strong rhetoric from OPEC continues to
spook investors, with shorts being forced to cover positions,"
ANZ bank said on Tuesday.
In a sign that producers are acting on their plans, Abu
Dhabi National Oil Company (ADNOC) has told customers that it
will cut crude supplies by 3-5 percent across its three export
grades, two sources with knowledge of the matter said on
The producer from the United Arab Emirates will reduce
Murban and Upper Zakum crude supplies by 5 percent and will cut
Das crude exports by 3 percent, it said in a notice to term
ADNOC's move is among the first visible indicators that oil
markets will be physically tighter next year.
ADNOC's supply cuts will mostly hit Asia, although refiners
there said that the cuts fell within contractual allowances
under which ADNOC can alter agreed monthly supply volumes.
UAE crudes tend to be medium grade qualities in terms of
density (heavy or light) and sulphur content (sweet or sour).
Murban is the UAE's main onshore crude oil and is relatively
light. Besides state-controlled ADNOC, France's Total,
South Korea's GS Energy and Korea National Oil Corporation
(KNOC), and the Japan Oil Development Company (Jodco) are
partners in producing Murban crude.
The UAE's main offshore oils are Upper Zakum and Das crude.
Upper Zakum, owned to 28 percent by U.S. oil major
ExxonMobil, and 12 percent Jodco, is a medium grade
(Reporting by Henning Gloystein; Editing by Joseph Radford)