UPDATE 3-Saudi meets OPEC vow with big supply hike to Asia

Thu Oct 11, 2007 10:18am BST
 
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(Adds prices paras 3-4, analysts quote paras 8-9)

By Osamu Tsukimori and Jiwon Chung

TOKYO/SINGAPORE, Oct 11 (Reuters) - Saudi Arabia told major Asian refiners on Thursday it will raise their crude sales by a tenth in November, more than expected as it meets the lion's share of OPEC's pledge to boost output, industry sources said.

The recovery in shipments to 100 percent of contractual volumes was a surprise to many customers, and would equate to as much as a 350,000 barrels per day (bpd) increase in exports.

That is more than half of OPEC's promised 500,000-bpd rise agreed one month ago after the kingdom convinced other members to raise output in a gesture to consumer nations, a move that has failed to tame oil prices still near record highs above $80.

The first confirmation of extra OPEC oil is still unable to help ease prices, although Asian traders said higher supplies would likely depress differentials for spot crude in December.

U.S. crude oil futures CLc1 rose 35 cents to $81.65 a barrel by 0917 GMT, not far off their record high of $83.90 struck in September.

Sources at two Japanese refiners and one in South Korea said state-run Saudi Aramco had notified them that it would supply the entire volume agreed under the refiners' annual contract, the first time since OPEC began cutting output in November 2006.

Traders with refiners in Taiwan and China said they expected the same, but had yet to receive formal notices.  Continued...

 

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