Oil & Gas

29 Jun 2020

UAE's Adnoc Rolls Over Crude Nomination Cuts in August

29 Jun 2020  by Nader Itayim&Ruxandra Iordache   

Abu Dhabi's state-owned Adnoc will continue to apply 5pc cuts to client nominations for August-loading volumes of the company's four main grades, in line with July restrictions.

The August reductions will be applied to supplies of Upper Zakum, Das Blend, Umm Lulu, as well as flagship grade Murban, according to a source familiar with the matter. Nominations for all four grades are already set to be lowered by 5pc in July.

Adnoc will retain nomination cuts in August, even as Opec+ production constraints are set to relax slightly that month. Under the latest Opec+ agreement, the UAE pledged to cap its output at 2.446mn b/d until the end of July, but can produce up to 2.59mn b/d over August-December. The UAE joined Kuwait and Saudi Arabia in volunteering further declines this month, which should limit its production to around 2.35mn b/d in June.

Murban and Upper Zakum nominations were tightened more sharply in the first two months of the Opec+ deal, at 15pc in May and 20pc in June for each stream. Abu Dhabi informed customers of its July nomination cuts on 28 May, prior to the 6 June Opec+ decision to extend the May-June production ceiling of most participants — implying that Adnoc could have to satisfy some July customer requirements from storage.

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