Oil producers cut prices, hurry sales

SINGAPORE - Oil producers have embarked on a global round of price cuts and production boosts as part of a fight for market share, ignited by top exporters Saudi Arabia and Russia, that has wiped more than 40% off the international oil market this year.Following the collapse last week of coordinated output cuts by Saudi Arabia, Russia and other major producers, Saudi Arabia said yesterday it would boost oil production capacity for the first time in more than a decade to 13 million barrels per day (bpd).A day earlier, it announced a record increase in crude supply to 12.3 million bpd in April.United Arab Emirates' ADNOC joined in with a promise to increase production to more than 4 million barrels per day (mmbpd) in April, and accelerate a capacity expansion to 5 mmbpd.These increases followed news on Tuesday that Russian oil companies might boost output by as much as 500 000 bpd, which sent the Russian ruble and stock markets plunging and delivered a fresh blow to crude prices that had already fallen by 25% on Monday."Anything can happen in a crazy market," said a trader, who asked not to be named, from a Chinese refinery that has aggressively stepped up its purchase of cut-price Middle East crude.Aggressive decreasesAdding to the melee, Iraq, Kuwait and UAE - all members of producer group the Organisation of the Petroleum Exporting Countries (OPEC) - announced aggressive cuts to official selling prices (OSPs) this week to ensure their own sales were sustained.Another OPEC member, sanctions-hit Venezuela offered its flagship Merey heavy grade at a whopping US$23 per barrel discount to benchmark Brent crude, equivalent to less than US$14 a barrel yesterday.In addition to price cuts, some producers sought to get ahead of competitors by offering cargoes earlier than usual. – Nampa/Reuters

Oil producers cut prices, hurry sales

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