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Kuwait and UAE follow Saudi Arabia in cutting oil output

Oil prices jumped 3 percent on Friday as a report showed OPEC producers fulfilling their pledge to cut back supply this month.

US light crude for August delivery rose US$0.97 to US$29.48 a barrel, easing losses of 7 percent over the previous six sessions. Benchmark Brent crude in London was up US$0.73 at US$27.02 a barrel.

Prices rose as tanker-tracking consultancy Petrologistics told clients that the world's top oil supplier, Saudi Arabia, cut output this month by 1.2 million barrels per day (bpd), or 12 percent, to 8.4 million bpd.

Gulf allies Kuwait and the United Arab Emirates followed the Saudi move, helping to bring OPEC output down 1.84 million bpd to 25.76 million in June, it said.

Strong crude oil imports have begun to rebuild US inventories, which are 10 percent below last year.

The US government on Wednesday reported a weekly increase of four million barrels in crude oil stockpiles.

"The Petrologistics estimates mean we may see crude imports tapering off, if OPEC production indeed starts falling off," said Phil Flynn, market analyst at Alaron Trading in Chicago.

"And that has sparked concern that supplies may tighten again," Flynn said.

Last week OPEC opted to maintain its current ceiling until another emergency meeting on July 31, when it hopes to have a clearer picture of Iraq's production.

Iraqi officials said this week that production by mid-July would be only 1.0 million to 1.2 million bpd, due to continued looting and technical snags, missing their target of 1.5 million bpd.

Baghdad will ship its first crude oil this weekend since the beginning of the post-war reconstruction phase in Iraq, after auctioning off some 10 million barrels held in storage.

Still, the prospect for sustained oil exports from Iraq remains uncertain as the US appears to be facing increasing instances of hostility and violence in the country.

OPEC has raised the prospect of collaboration with non-OPEC producers in the event of any output cuts.

Non-OPEC Norway said on Friday that Saudi Arabian Oil Minister Ali al-Naimi will visit the country June 26 to June 29.
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