Any OPEC oil hike to be eroded by UAE work
VIENNA/SINGAPORE (Reuters) - Any possible extra OPEC crude supplies will be offset by planned maintenance on United Arab Emirates oilfields in late October and November, traders said on Tuesday.
But the work in OPEC-member UAE has been accounted for in the plans of Asian refiners, who would still welcome any extra barrels, they said.
OPEC, supplier of over a third of the world's oil, will meet in Vienna on Tuesday. Saudi Arabia and other Gulf Arab states back a token increase in supply, an OPEC source said on Monday, in the face of crude prices within a dollar of record highs.
But the UAE, the world's sixth largest producer, has work scheduled at three of its largest oilfields that is expected to cut output by 810,000 barrels per day at its peak in November, according to industry sources.
"Some endusers have prepared for the November shortage in Abu Dhabi crude. Any rise would be okay. The high flat price and the huge premium will kill demand," a trader with a North Asian refiner said.
Maintenance is set to take place for two to three weeks on the Lower Zakum, Upper Zakum and Umm Shaif fields from the end of October.
The maintenance will hit production as demand from consumer countries for oil rises ahead of the northern hemisphere winter. The UAE's crude is a favored feedstock for Japanese refiners making heating fuels.
Price premiums on the spot Middle East crude market have surged over the past month on the back of the maintenance, sending flagship light sour Murban to premiums of above 90 cents to its official selling price, the highest in well over a year, adding to surging flat prices.
The UAE is planning to boost its output capacity to 3.5 million bpd by 2011 to 2012, from around 2.8 million to 2.9 million bpd now. The work will allow progress on expansion plans.
Upper Zakum is the world's fourth-largest oilfield, according to operator the Zakum Development Company (ZADCO).
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