TOKYO: Crude supplies to Japan from its biggest supplier Saudi Arabia will not be impacted by last year’s agreement between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut output, a senior official of the Kingdom said on Thursday.
“The recent agreement among OPEC and non-OPEC members for oil exports reduction will not impact our commitments and oil exports to Japan,” said Aabed Al-Saadoun, deputy minister for company affairs at Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources.
He was speaking at an oil industry symposium in Tokyo.
Saudi Arabia is the No.1 crude oil supplier to Japan, with its oil accounting for 1.13 million barrels per day (bpd), or 33.5 percent of its total imports in 2015.
Under the accord reached late last year, OPEC, Russia and other non-OPEC members will curtail oil output by nearly 1.8 million bpd, initially for six months starting Jan. 1.
Saudi Arabia, which said it pumped 10.47 million bpd in December, has cut production slightly below the target it adopted under the agreement, Energy, Industry and Mineral Resources Minister Khalid Al-Falih said earlier this month.
Saudi Aramco has cut February term crude supplies to refiners in India and Southeast Asia, but it kept February supplies to most North Asian refiners at full volumes for a second month, trade sources said, indicating it will have to continue cutting exports to Europe and the US.
Deputy Crown Prince Mohammed bin Salman visited Japan last September, along with Al-Falih and other dignitaries, to gain understanding for Saudi Arabia’s Vision 2030 plan to diversify its economy and reduce its dependence on oil.
Speaking at the symposium, Al-Saadoun said Japan was “one of our strongest partners.”
Benchmark Brent crude was up 45 cents a barrel at $55.53 by 1245 GMT on Thursday, while US light crude futures were up 35 cents at $53.10.
Traders attributed the gains largely to the dollar, which has lost 3.9 percent in value since peaking in January.
However, oil prices were capped by data from the US Energy Information Administration (EIA) showing an increase of 2.84 million barrels last week in US crude inventories to 488.3 million barrels, pointing to ample supply in the world’s biggest market.
US oil production has risen by 6.3 percent since the middle of last year to 8.96 million barrels per day (bpd).
“Crude oil and other liquids inventories grew by 2 million bpd in the fourth quarter of 2016, driven by an increase in production and a significant, but seasonal, drop in consumption,” the agency said.
The two benchmark crudes have stayed within fairly narrow trading ranges since OPEC agreed to limit production.
“Oil prices have hardly budged at all for several days now,” said Carsten Fritsch, senior commodities analyst at Commerzbank in Frankfurt.
“Brent appears stuck at between $55 and $56 per barrel, while WTI is hovering around the $53 per barrel mark.”
Fritsch argues the current range is unlikely to last if US oil production keeps rising:
“We still believe there are more arguments in favor of prices breaking out of their current corridor and embarking on a downward trajectory.”
“The recent agreement among OPEC and non-OPEC members for oil exports reduction will not impact our commitments and oil exports to Japan,” said Aabed Al-Saadoun, deputy minister for company affairs at Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources.
He was speaking at an oil industry symposium in Tokyo.
Saudi Arabia is the No.1 crude oil supplier to Japan, with its oil accounting for 1.13 million barrels per day (bpd), or 33.5 percent of its total imports in 2015.
Under the accord reached late last year, OPEC, Russia and other non-OPEC members will curtail oil output by nearly 1.8 million bpd, initially for six months starting Jan. 1.
Saudi Arabia, which said it pumped 10.47 million bpd in December, has cut production slightly below the target it adopted under the agreement, Energy, Industry and Mineral Resources Minister Khalid Al-Falih said earlier this month.
Saudi Aramco has cut February term crude supplies to refiners in India and Southeast Asia, but it kept February supplies to most North Asian refiners at full volumes for a second month, trade sources said, indicating it will have to continue cutting exports to Europe and the US.
Deputy Crown Prince Mohammed bin Salman visited Japan last September, along with Al-Falih and other dignitaries, to gain understanding for Saudi Arabia’s Vision 2030 plan to diversify its economy and reduce its dependence on oil.
Speaking at the symposium, Al-Saadoun said Japan was “one of our strongest partners.”
Benchmark Brent crude was up 45 cents a barrel at $55.53 by 1245 GMT on Thursday, while US light crude futures were up 35 cents at $53.10.
Traders attributed the gains largely to the dollar, which has lost 3.9 percent in value since peaking in January.
However, oil prices were capped by data from the US Energy Information Administration (EIA) showing an increase of 2.84 million barrels last week in US crude inventories to 488.3 million barrels, pointing to ample supply in the world’s biggest market.
US oil production has risen by 6.3 percent since the middle of last year to 8.96 million barrels per day (bpd).
“Crude oil and other liquids inventories grew by 2 million bpd in the fourth quarter of 2016, driven by an increase in production and a significant, but seasonal, drop in consumption,” the agency said.
The two benchmark crudes have stayed within fairly narrow trading ranges since OPEC agreed to limit production.
“Oil prices have hardly budged at all for several days now,” said Carsten Fritsch, senior commodities analyst at Commerzbank in Frankfurt.
“Brent appears stuck at between $55 and $56 per barrel, while WTI is hovering around the $53 per barrel mark.”
Fritsch argues the current range is unlikely to last if US oil production keeps rising:
“We still believe there are more arguments in favor of prices breaking out of their current corridor and embarking on a downward trajectory.”
