June 21, 2003	Saturday	Rabi-us-Sani 20,1424

LONDON, June 20: Saudi Arabia is living up to its Opec agreement to slash oil output in June, despite high prices, and has returned to quota compliance after testing maximum capacity during the Iraq war, data showed on Friday.

Gulf allies Kuwait and the United Arab Emirates followed the Saudi move, helping to bring Opec output down 1.84 million barrels per day (bpd) to 25.76 million in June, oil consultants Petrologistics estimated.

Excluding Iraq, which is not part of Opec’s quota system, the 11-member cartel actually pumped slightly less than its official 25.4 million bpd ceiling, the data showed.

After a period of high production during the war, it is a sensible cut given that stock cover in the US is on a slowly rising trend, said Leo Drollas, a consultant with London’s Centre for Global Energy Studies.

Drollas said the dramatic cut was unlikely to tighten global oil markets excessively, and saw prices softening later this year as Iraqi output rises.

US crude oil futures rose 24 cents to $30.20 per barrel on Friday, having peaked near $40 before the Iraq war. Benchmark Brent crude gained 29 cents to $26.58.

Geneva-based Petrologistics estimated in a preliminary report that the world’s top oil supplier Saudi Arabia cut by 1.2 million barrels per day, or 12 per cent, in June to 8.4 million bpd. Its Opec quota is 8.3 million bpd.

Kuwait and the UAE cut by 250,000 and 130,000 bpd respectively in June, Petrologistics said.

Venezuela, which is still struggling to stabilise its oil industry after a crippling strike in December and January, dropped by 360,000 bpd to 2.45 million bpd, Petrologistics said.

Iraq, which is not part of Opec’s quota agreements, was seen pumping 450,000 bpd this month.—Reuters