ADNOC cuts April term crude supply nominations by 5%: sources
Abu Dhabi National Oil Co has informed its term customers of supply cuts across all of its crude oil grades for April-loading cargoes by 5%, trade sources told S&P Global Platts on March 2.
Last month, ADNOC had informed its customers that lift contracted monthly volumes — known as term lifters — that it would cut the quantity available for export in March by 15% for Upper Zakum and Murban, by 10% for Umm Lulu and by 20% for Das Blend, Platts reported earlier.
The cuts in term supply by the state-owned producer have become common due to over production in August last year and a pressing need to curb production and remain within limits of the OPEC+ supply cut agreement.
“Last month cuts were around 15-20% and much more significant. This month’s cuts are within tolerance [level] and will have almost no effect [on buying intent],” said a trader with a South East Asian refinery.
Some noted that with lesser cuts to term volume, this could result in Asian refiners reducing their purchases on the spot market.
“Japan’s spot demand shall decrease slightly. Last month, spot buying was high due to larger ADNOC and Saudi [term supply] cuts,” said a trader with a North Asian refinery.
Meanwhile, oil supply increase beckons post the OPEC+ meet on March 4 while refinery maintenance persists across most Asian countries.
“It’s difficult to predict what comes from the producers cartel, though I expect they produce and supply more to make up for [future] demand increase and to offset the high-pace oil price increase,” said the trader with a North Asian refinery.