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Asian refiners say "no thanks" to more Saudi oil

Mon Jun 16, 2008 3:59pm IST
 
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By Maryelle Demongeot

SINGAPORE (Reuters) - Refiners across Asia said on Monday they were not likely to buy more Saudi crude at current prices, highlighting the kingdom's challenge in attempting to contain soaring markets by promising extra barrels.

The world's top exporter is set to increase output to 9.7 million barrels per day (bpd) in July, United Nations chief Ban Ki-moon said on Sunday, the first official indication of Saudi Arabia's second supply boost in as many months.

The extra 250,000 bpd would come on top of the 300,000 bpd it promised to pump this month, most of which appeared to head West as margins for simple refiners in Asia slumped to their deepest losses in over a decade.

"We've already made our plans, and barring something out of the ordinary, I don't foresee making any changes to them," a source with a Japanese lifter told Reuters.

Another lifter added: "We have no interest in extra barrels."

State oil firm Saudi Aramco has made clear to its Asian customers that they can have more crude if they want it. Just over half the kingdom's exports go to Asia.

But most Asian lifters declined offers of additional crude for lifting in July during the monthly allocation process that was concluded last week. Only one refiner took up the offer, buying 1 million barrels, an industry source told Reuters.

The issue appears to be about quality.  Continued...

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