November 12, 2002	Tuesday	Ramazan 6, 1423

LONDON, Nov 11: Saudi Arabia, the world’s biggest oil exporter, has cut its crude allocations to major European customers for December, surprising buyers who had expected steady supplies, traders said on Monday.

One European major received 31 per cent below full term volumes in December compared to 29 per cent in November, the traders said.

Another received 38 per cent below standard contract volumes in December versus 30 per cent in November, they added.

Traders said that Opec kingpin Saudi Arabia was now expected to provide European customers with about three per cent less volume in December.

“I was very surprised. We had expected steady volumes, especially with all this extra oil in the market,” said a trader.

The Saudi cuts come at a time when the Organization of Petroleum Exporting Countries is producing oil way above its official ceiling.

Opec crude output rose 750,000 barrels a day to 27.26 million bpd in October with extra leakage from 10 members supposedly bound by quotas accounting for nearly half the increment, according to a Reuters survey.

“We don’t understand what is happening, especially because they were supposed to be pumping all this extra oil,” said a trading source.

“It seems they are expecting the price of oil to fall so they are trying to manage the market through the allocations,” he added.

Traders said earlier on Monday that Saudi Arabia had told South Korean oil term customers it would cut crude supply for December by about 18 per cent from standard contracts, unchanged from November.—Reuters