Oil sails higher as OPEC squeezes Asian supplies

Oil sails higher as OPEC squeezes Asian supplies

SINGAPORE (Reuters): Oil prices climbed to fresh highs in Asia
on Thursday as concrete evidence emerged that oil producers were
implementing plans to cut world supplies by two million barrels
per day, traders said.

Saudi Arabia, the world's biggest oil exporter, issued notices
to Japanese and South Korean customers that April supplies will
be cut, Asian oil traders said.

May Brent crude futures on the Singapore International
Monetary Exchange (SIMEX) climbed 17 cents to a four-month high
of US$13.44 per barrel.

New York Mercantile Exchange (NYMEX) April crude futures rose
25 cents to $15.30 per barrel, matching a five-month high. By
0730 GMT, the contract was last traded at $15.25, just off the
high.

"The market has been swept up in light volume," Matt Sims, a
broker with ED&F Man said. "The fact that producers are already
cutting back exports to Asia has got to be the news driving it."

Markets were spurred more than four percent higher overnight
after several producers said they would start telling customers
of cutbacks following last week's meeting at The Hague where they
agreed to cut supply.

The first concrete evidence of the cuts emerged in Asia
earlier on Thursday, with Japanese traders saying they had
received notices that their import requirements for April would
be cut 11-12 percent.

South Korean refineries were told by the kingdom that supplies
in April would be cut 6-9 percent and Taiwan was told cuts would
total around six percent.

Brent averaged just $13.34 per barrel last year, the lowest in
more than 20 years, and OPEC lost more than US$50 billion in
revenues owing to the slump in prices.

In October 1996, Brent had sailed to more than $25 per barrel.

The Organization of Petroleum Exporting Countries is looking
to ratify the Hague deal at its Vienna meeting next week.