The allocations, ahead of winter in the northern hemisphere, show there are no signs as yet of Saudi Arabia trimming output to make way for a recovery in production from Libya.
Policymakers and investors have been worried that any cut in supplies may lead to a further increase in oil prices, worsening the global economic outlook. The International Energy Agency (IEA) recently warned that oil prices above $100 a barrel are a threat to the global economy and current prices are already having an impact.
The burden of high energy costs on growth contributed to the sharp slowdown in the global economy in the wake of the 2008 financial crisis. High prices led to such a sharp slowdown in fuel demand that OPEC was forced to make record output cuts.
UAE Oil Minister Mohammed bin Dhaen Al-Hamli said producers can tolerate a further fall in oil prices to $80-$100 a barrel, the first indication of a preferred price range from a Gulf producer since OPEC talks collapsed in June.
The Chinese refiner has bought one million barrels of Arab Light on top of its contract volume, the source familiar with the matter said. The rest of the buyers will get volumes unchanged from November, they said.
“We have got full allocations. Beyond that, we got one million barrels more of Arab Light we asked for,” the source said.
Asked if the refiner bought Arab Light to produce more diesel to ease a shortage of the fuel in the country, the source said, “No special target.”
China’s top refiners have bought about 320,000 tons of diesel to cover domestic shortages of the power-generating fuel, rare purchases by the world’s second largest economy that will squeeze an already tight market.
The refiner asked for Arab Light because they had demand for the crude, not because of the recent cut in its prices, the source said.
Saudi Arabia unexpectedly cut official selling prices (OSPs) for most of its crude for December, helping lower costs for refiners that have been facing sliding profits from weakening gasoline and naphtha prices.
Some buyers of Saudi crude in Asia are considering requesting more than their contracted volumes in December, encouraged by the drop in OSPs, though many Asian refiners are unlikely to snap up extra cargoes from the country because of dwindling demand prospects.
Sources said extra barrels that the buyers could receive from Saudi were limited, however, by restricted tanker capacity.
Saudi Arabia made no changes to the operational tolerance in the supply allocation, the sources added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 percent more or less crude than contracted.
