The deeper cuts, which industry sources said could be a signal for better compliance with OPEC's existing supply curbs and aimed at supporting prices, come as demand from Asian refiners is likely to fall in the next quarter.

The world's top oil exporter has notified refiners in Japan, South Korea, Taiwan and mainland China that it will increase its crude supply cuts to about 10 percent below term contracts for next month, versus 7-8 percent below contracted volumes for this month. "We have seen about a 10 percent cut for April," one source at a refiner said.

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The cut to Asia, which buys about half of the kingdom's seven million barrels per day exports, takes supplies closer to levels last month, when Saudi Arabia reduced its supplies to the region 10-13 below contracted volumes to implement OPEC's second pledged output curb. Some refiners said the supply volumes of Saudi heavy, the heaviest of the country's crude oil grades, were cut the most steeply to around 15 percent below their contracted volumes.

"It seems a technique to defend oil prices around a US$60-a-barrel level ... cutting Saudi heavy's supply volumes more than others, and selling more expensive Saudi light and extra light," another source said.

Other traders said the deeper supply curbs from OPEC's most influential member is a message for the group to fully comply with agreed reductions.

OPEC pledged to curb supplies by a total of 1.7 million bpd, including a 500,000 bpd installment effective from last month, after oil prices slid from record highs above US$78 (HK$608.40) a barrel in July.

Most remarks from OPEC ministers so far suggest the group will leave its output unchanged at its meeting in Vienna Thursday. But Roy Mason of consultancy Oil Movements estimates OPEC seaborne exports on a four-week average would rise to 24.05 million bpd until March 24, against 23.98 million bpd in the four weeks to February 24.

REUTERS