This is big news as it begs the question about current capacity. The Saudi's are cutting 10% in a $70 plus oil price environment ahead of 4th qtr demand.
IMO - they don't have it
"Saudi Aramco, the world's largest state oil company, will cut supplies of its Arab Light and Arab Heavy crude to refiners in Japan, China and South Korea by between 9.5 percent and 10 percent below their contracted volume,.."
Oil Rises After Saudi Arabia Cuts Shipments to Asian Refiners
bloomberg.com
By Mark Shenk
June 11 (Bloomberg) -- Crude oil rose after Saudi Arabia, the world's biggest exporter, told Asian refiners that it would curb shipments for a ninth month in July.
Saudi Aramco, the world's largest state oil company, will cut supplies of its Arab Light and Arab Heavy crude to refiners in Japan, China and South Korea by between 9.5 percent and 10 percent below their contracted volume, officials said. The Organization of Petroleum Exporting Countries last year pledged to cut supplies by 1.7 million barrels a day to support prices.
``I suspect that the Saudis are worried about rising inventories,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``They have been creamed a couple times when inventories have risen too high and they've lost control of the market.''
Crude oil for July delivery rose 43 cents, or 0.7 percent, to $65.19 a barrel at 9:06 a.m. on the New York Mercantile Exchange. Prices are down 9 percent from a year ago.
Brent crude oil for July settlement rose 31 cents, or 0.5 percent, to $68.91 a barrel on the London-based ICE Futures exchange.
Iran's Oil Minister Kazem Vaziri-Hamaneh said there's no shortage of crude oil globally and the high oil price is because of low product stockpiles. Iran, OPEC's second-largest oil producer, will start gasoline rationing ``very shortly,'' he said after attending the Asia Oil and Gas Conference in Kuala Lumpur today.
Brewing Confrontation
The U.S. increased its criticism of Iran's stonewalling of nuclear inspectors, and the United Nations atomic agency's chief warned of a ``brewing confrontation'' over Iran's uranium enrichment program.
``I am increasingly disturbed by the current stalemate and the brewing confrontation -- a stalemate that urgently needs to be broken, and a confrontation that must be defused,'' International Atomic Energy Agency Director General Mohamed ElBaradei told diplomats today at the IAEA's Vienna offices, according to a copy of prepared remarks given to reporters.
Concern that the dispute over Iran's nuclear program might disrupt shipments from the country has supported prices over the last year.
Gasoline for July delivery in New York fell 0.26 cent to $2.1245 a gallon. Futures touched $2.105 on June 8, the lowest since April 20.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net |
