TOKYO: Opec member Kuwait has notified at least two term customers in Asia that it would cut their crude oil supplies by five per cent from this month, sources said yesterday.
The move by the Middle East oil producer followed similar action this week by some Opec members, providing further evidence of the group's determination to stem a price slide.
Iran said it will cut its crude oil production by 199,000 barrels a day from today. Iranian Oil Minister Gholam Hossein Nozari said the production decrease is in line with an Opec decision last week to cut production by 1.5 million barrels a day in response to a sharp fall in oil prices.
Nozari said that Opec may hold another urgent meeting if crude prices don't rebound.
Oil prices plunged under $60 per barrel in London this week.
The price of oil has more than halved since scaling record heights above $147.
Oil prices dived to 17-month lows on global recession fears, hitting $59.02 in London and $61.30 in New York on Monday before clawing back some lost ground.
"Oil markets seem to be pricing in a deep and long recession that will derail oil demand growth this year and next," wrote UBS economist Jan Stuart in a research note to clients.
"Even though we still think that the credit crunch is exaggerating the real shift in oil demand trends, we have no way to know." UBS also slashed its forecasts for average Brent oil prices to $60 next year and $75 in 2010 from previous estimates of $105 and $116 respectively.
Yesterday, New York's main oil futures contract, light sweet crude for delivery next month, firmed to $64.50 from $63.16 last week.
Brent North Sea crude dipped to $62.07 from $62.62 last week.
Kuwait did not make clear if the cuts would continue next month or how long they would last.
Most Asian customers have already fixed their loading schedules for the month and the sudden cut came as unexpected to some lifters who had hoped the cuts would start from next month.
A source with a third Northeast Asian lifter said it also received the 5pc reduction but was unsure whether the cut was effective from this month or next month.
The Asian lifters had received the full contracted volumes from Kuwait until last month, the sources added.
Earlier this week, Abu Dhabi National Oil Company, the state-run firm for the UAE's key oil producer Abu Dhabi, said it would reduce its export volumes by 5pc to 15pc depending on crude oil grades such as Murban.
Nigeria will reduce crude oil export volumes by 5pc due to Opec's production cut, its state oil firm said.
Opec agreed last Friday at an emergency meeting to slash production levels by 1.5 million barrels per day.
Many traders suspect the agreed Opec cuts would come mainly from Saudi Arabia, the world's top oil producer, which said at the Opec meeting in Vienna that it would reduce its output by 466,000 bpd.
Saudi Arabia has not yet notified its customers of supply allocations after the meeting. Term customers expect to receive notifications from the kingdom this weekend or next week.
