* In talks with customers on different scenarios
* Looking at 3-7 percent cuts in Feb
* Supply cuts to vary among customers, different grades
(Adds background, comment)
By Florence Tan and Rania El Gamal
Jan 5 Saudi Aramco has started talks with
customers globally to discuss possible cuts of 3 percent to 7
percent in February crude loadings as it moves to implement an
agreement on curbing global oil output, sources said on
The Organization of the Petroleum Exporting Countries agreed
in late November to cut production in the first half of 2017 to
reduce global oversupply and prop up prices.
"Aramco is approaching all its customers for possible cuts
from February and discussing likely (supply) scenarios," one of
the sources said.
"Nothing is confirmed yet," he said, adding that the
scenarios were for 3 percent to 7 percent cuts.
Aramco did not immediately comment.
Under the deal, Saudi Arabia agreed to cut output by 486,000
barrels per day (bpd), or 4.61 percent of its October production
of 10.544 million bpd.
Saudi Energy Minister Khalid al-Falih said last month that
January oil production could fall below the kingdom's agreed
"We have done a very high reduction to Aramco's customers in
Europe and the U.S., and some customers in Asia, which will
bring the kingdom's production below the agreed upon ceiling,"
State oil giant Aramco will be receiving nominations for
February crude supplies from its customers and is assessing
which grades it could cut, a second source said.
Saudi oil buyers will be notified by Jan. 10 of their
respective crude allocations for February.
"Saudi Arabia, out of OPEC (members), is the country where
we should expect the most compliance (to the OPEC agreement). In
a sense, it is a confirmation that they are doing what they said
they will do," Petromatrix oil strategist Olivier Jakob said.
Saudi Arabia's crude output fell from a revised 10.60
million bpd in November to 10.45 million bpd in December,
according to a Reuters survey of OPEC production.
"Exports are down markedly from a massive November number,"
said one source who tracks Saudi output. "The bottom line is
December is down from November with regard to supply to market."
Aramco raised the official selling price (OSP) for most of
the crude grades it sells to Asia and the United States, but cut
prices to Europe.
The price of Arab Light crude for Asian customers rose by
$0.60 a barrel compared with January to $0.15 a barrel below
the Oman/Dubai average.
Traders in Asia said the price hikes were slightly more than
expected, and coming on the back of supply cuts in February.
(Additional reporting by Nidhi Verma in NEW DELHI and Aizhu
Chen in BEIJING and Ahmad Ghaddar in London. Writing by Ahmad
Ghaddar and Florence Tan; Editing by Alexandra Hudson and David