United States Oil Fund (USO)

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OPEC to Cut Supply on Slower Asian Demand, Oil Movements Says

By Grant Smith - Jun 30, 2011 11:30 AM ET

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OPEC will cut oil shipments through to the middle of July as Asian refiners reduce imports while conducting seasonal maintenance work, according to tanker- tracker Oil Movements.

The Organization of Petroleum Exporting Countries will ship 22.7 million barrels a day in the four weeks to July 16, down 0.7 percent from the period to June 18, the consultant said in a report. The data, which excludes Ecuador and Angola, does not reflect any change in OPEC output in response to the International Energy Agency’s release of emergency stockpiles, Oil Movements said.

“Demand is diminished relative to what might have been expected and it’s mainly happening in the east,” Roy Mason, the founder of Oil Movements, said by telephone from Halifax, England. “They’re getting towards the peak of the maintenance season in the east, so it may be a temporary lull.”

The Paris-based International Energy Agency, an adviser to 28 oil-consuming nations, said June 23 its members will offer 60 million barrels of oil, the first deployment of strategic stockpiles in five years, after OPEC failed on June 8 to announce a plan on making up for halted Libyan exports. Saudi Arabia pledged that day to keep consumers supplied in the absence of an OPEC accord.

Shipments from Middle Eastern producers, including non-OPEC members Oman and Yemen, will drop 0.9 percent to 17.44 million barrels a day in the period, the report showed.

Crude on board tankers will average 485.44 million barrels in the four weeks, down 0.8 percent from 489.41 million barrels in the period to June 18, Oil Movements said.

Oil Movements calculates shipments by keeping a tally of tanker-rental agreements. Its figures exclude crude held on board ships as floating storage.

OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the group’s quota system.