* Two or three Asian refiners interested in buying more
* Keeps full contractual commitments to two buyers
* OPEC on Wednesday failed to reach deal on raising output
(Adds Indian refiners plan to buy extra Saudi oil)
By Nidhi Verma and Osamu Tsukimori
NEW DELHI/TOKYO, June 10 Top oil exporter Saudi
Arabia has offered more crude to Asian refiners in July,
evidence that it is taking steps to unilaterally increase
supplies after OPEC talks collapsed earlier this week.
India's Mangalore Refinery and Petrochemicals Ltd.
has bought about 600,000 barrels of extra oil for July from the
kingdom, two sources with direct knowledge of the matter said.
Two or three Asian buyers are keen on more oil, and will
finalise any additional volumes in coming days, a separate
refiner source said.
Adding to indications that the Saudis are prepared to go it
alone in meeting rising demand for oil, a Saudi newspaper on
Friday said the world's top exporter would lift output in July
to 10 million bpd, from 8.8 million bpd in May.
The additional offers to refiners come after the
Organization of the Petroleum Exporting Countries failed to take
a decision on raising output on Wednesday, resulting in the
talks breaking down in acrimony.
Crude futures fell on Friday on the news of extra Saudi
supply, paring earlier gains after Brent rose to a five-week
high of $120 a barrel.
Asia, led by China, is driving the global increase in oil
consumption, so higher Saudi supply would benefit refiners in
Oil prices were near their 2-1/2 year highs in recent weeks
in part due to concerns of supply disruption from the Middle
East and North Africa amid rising demand from emerging nations
such as China and India.
The Paris-based International Energy Agency (IEA) expects
Asia to burn 900,000 barrels per day (bpd) more oil in 2011 than
2010, over 70 percent of the 1.29 million bpd global demand
growth forecast for the year.
NOT ALL NEEDED
Still, many regional refiners already have what they need
for July, industry sources with direct knowledge of negotiations
said on Friday, so have declined Saudi Arabia's offer of
"They are asking if anybody has an interest in additional
volumes," a source at a north Asian refiner said. "They have not
asked us for a while."
At least two Asian term buyers said Saudi Arabia will supply
them with full contracted volumes of crude oil in July, steady
There were no adjustments in allocated volumes of heavy and
light crude grades, the sources said, adding that the move was
"in line with expectations."
Saudi Arabia made no changes to the operational tolerance in
the supply allocations, the sources added, meaning buyers have
the option of asking for cargoes to be loaded with up to 10
percent more or less crude than contracted.
OPEC estimates show an implied market requirement of about 2
million barrels per day more of oil for the third quarter and
1.5 million bpd for the fourth quarter of this year, and Saudi
Arabia would be keen to keep its share in fast growing markets.
OPEC and non-OPEC oil producers are competing hard for the
market in China. Riyadh, unwilling to give up ground, supplied
Beijing with more oil even as the kingdom instigated OPEC's
record supply cuts as recession engulfed many of the world's
major economies in 2008-2009.
China is expected to bring online around 500,000 bpd of new
refining capacity this year.
(Reporting by Osamu Tsukimori in Tokyo, Judy Hua in Beijing,
Nidhi Verma in New Delhi, Alejandro Barbajosa in Singapore;
Writing by Manash Goswami; Editing by Michael Urquhart)