The state-owned company located in the UAE reduced the supply cut for Murban, its largest export grade, to 10 per cent of contracted volumes from 15 per cent in December, the company today said in an e-mail to buyers. Abu Dhabi National, known as Adnoc, also increased its Umm Shaif shipments, setting the level at a reduction of 10 per cent of agreed amounts from 15 per cent next month.

The move is "in accordance with the Opec decision to reduce production," the company said. The Organisation of Petroleum Exporting Countries has implemented production quotas since September 2008 after crude plunged from its record of $147.27 a barrel as the global recession limited fuel demand.

The group, responsible for about 40 per cent of global supplies, has been steadily increasing their output amid higher prices and signs of gains in demand from China and India. Its compliance with the production quotas dropped to 60 per cent in October from 62 per cent in September, according to their monthly market report ? on November 11.

The UAE is the fourth-largest producer of the Organisation of Petroleum Exporting Countries, pumping 2.25 million barrels a day in October, according to a Bloomberg survey. The country, which exports most of its crude oil to Asia, has the capacity to produce 2.8 million barrels a day.

Supplies of its Upper Zakum grade were reduced to 20 per cent of contracted volumes from 15 per cent in December. Lower Zakum was left at a cut of 10 per cent. Murban production was 1.2 million barrels a day, according to 2007 data from Energy Intelligence Group. That was more than double the Upper Zakum production and about four times greater than Umm Shaif output. —