The United Arab Emirates (UAE) will cut its crude oil exports by 5% in December to some futures customers in its key market, Asia, amid weak oil demand and prices, it said. five sources close to the plans. Reuters In Monday.
Abu Dhabi National Oil Company (ADNOC), the company that pumps nearly all the oil in major OPEC member and major crude exporter, the United Arab Emirates, has informed customers in Asia that the 5% cut is part of a so-called operational tolerance clause, according to Reuters sources. Under this clause, the export volumes could be adjusted by 5% more or less than the contractual volumes, due to logistical circumstances.
The reduction in UAE exports comes just as demand in China weakens amid new Covid restrictions, while oil prices have plunged in recent days on fears of a deeper slowdown in Chinese demand, in addition to fears of recessions elsewhere.
Early Monday, oil prices fell to their lowest level in 11 months, since December 2021. Crude Brent fell more than 3% to trade at $80 a barrel. The American reference, Crude WTI, was below the $74 a barrel handle at $73.91, down 3.12% on the day. Oil and other commodities plunged on Monday as unrest and protests over China’s Covid restrictions weighed on markets.
Concerns over weak demand in Asia and fears of oversupply also led to a significant drop in spot premiums for most grades of rough from Middle Eastern producers.
Some OPEC members, including the United Arab Emirates and Saudi Arabia, OPEC’s top producer, are actually cutting crude oil production as part of OPEC+’s collective production target cut by 2 million barrels per day (bpd). While most OPEC and non-OPEC producers have not met their quotas for months, the United Arab Emirates and the Saudis have met their targets and are now cutting production.
By Tsvetana Paraskova for Oilprice.com
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