By Shigeru Sato
Feb. 9 (Bloomberg) -- Saudi Aramco, the world’s biggest state oil company, will reduce crude supplies to Japan in March for a fourth month, refinery officials said.
The Dhahran, Saudi Arabia-based producer will slash shipments to Japanese refiners including Nippon Oil Corp., Idemitsu Kosan Co. and Cosmo Oil Co. by between 11 percent and 14 percent from levels agreed under annual contracts, said officials at two refiners who received notices from the company yesterday. They asked not to be identified because of confidentiality agreements.
Declining global oil demand is outpacing cuts in output by the Organization of Petroleum Exporting Countries, said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo. Emori forecasts the average price for oil traded in New York will slide to as low as $27 a barrel by the end of the year.
“It’s really tough for OPEC to put a break on falling prices,” Emori said by phone from Tokyo. “Oil, for now, has lost all its upward momentum.”
Morgan Stanley last week said crude in New York may average $35 a barrel this year as the global economy contracts, limiting demand for fuels. The price of West Texas Intermediate crude, the basis for futures traded on Nymex, will fall to a low of $25 in the second quarter, Morgan Stanley predicts.
Oil for March delivery was at $40.21, up 4 cents, in after- hours electronic trading at 1:57 p.m. in Tokyo.
OPEC has reduced production by 4.2 million barrels-a-day since September.
To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net.
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