Saudi Aramco makes good on Opec promise to cut January supplies

HOUSTON/LONDON: Saudi Aramco’s customers have received notice that January crude shipments will be cut in line with the November 30 Opec agreement, consultants PIRA Energy Group and Energy Aspects Ltd. say.

Buyers of Saudi crude have been informed that the kingdom will stand by its promise to cut output by 486,000 barrels a day to just over 10 million, PIRA Chairman Gary Ross said in a note to clients. North America is seen as the region that will receive the highest cuts, potentially riling US crude markets.

The Organisation of Petroleum Exporting Countries agreed to curtail oil production for the first time in eight years in Vienna last week, seeking to reduce global oversupply. Opec has asked 14 non-member producers to meet Saturday in Vienna to discuss further reductions.

“Saudi Aramco is exercising operational tolerance and reducing nominations as expected,” said Amrita Sen, chief oil market analyst at Energy Aspects Ltd. in London. “Given Saudis are targeting inventory reductions, US and Europe maybe more of a target than Asia.”

Other major producers are expected to follow Saudi Arabia’s lead, Ross told clients late Thursday.