UPDATE 3-Abu Dhabi deepens June crude supply curbs to Asia

* ADNOC cuts June supply of four main grades 16-18 pct

* Consultant says cut suggests OPEC ready to tighten again

SINGAPORE/TOKYO, April 28 - The United Arab Emirates will impose in June the deepest curbs on crude oil supplies to Asia since it began output cuts late last year, a signal OPEC may be ready to tighten supply again if necessary.

Abu Dhabi National Oil Co (ADNOC), the main oil producer for OPEC member the UAE, said on Tuesday it would reduce June supplies of its four main crude grades to Asia by 16-18 percent, versus 10-15 percent for May, a decision that surprised many traders.

"In the past they've done quite well by just giving out signals that they are prepared to tighten the market, either with slightly lower sales or a willingness to cut again," independent energy consultant Tony Regan said.

"By the end of May, they would see if they can get away with doing nothing or if they have to cut again," he said.

Gulf OPEC members including the UAE have said that an oil price of around $50 is lower than they would like but enough for now, as it would help spur economic recovery. [ID:nT319781]

Industry sources said that lower allocations to customers did not necessarily point to lower production. Oil output in the UAE was in line with OPEC's existing targets, sources said.

Oil supply from the Organization of the Petroleum Exporting Countries, which next meets on May 28, fell in March for a seventh consecutive month, but held above its target as some members pumped above agreed levels, a Reuters survey showed earlier this month.

The UAE, pumping oil at 2.23 million barrels per day (bpd) in March, was nearing its agreed target of 2.22 million bpd, the survey showed. [OPEC/O]

The emirate is usually among the first to announce its crude allocations, followed by Qatar.

SENTIMENT BOOST

ADNOC's supply cuts would give a boost to sentiment and price differentials for the few remaining unsold June barrels, traders said.

"It's a little deeper than we expected. We thought the cuts would be around the 15-percent level," said a trading source at a term buyer.

Reflecting the tighter supplies, the flagship Murban crude had traded last week at a premium near 20 cents a barrel against ADNOC, up from earlier deals done around 10-cent premiums.

Murban was assessed to fetch premiums near 10 cents this week, dampened by concerns a deterioration of the swine flu outbreak will hurt economic recovery and oil demand.

ADNOC would supply Murban crude at 18 percent below contracted volumes in June compared with a 15 percent cut in May, it said in a statement sent by fax.

The state oil company will also cut supplies of Lower Zakum and Umm Shaif by 18 percent, while Upper Zakum supplies will be 16 percent below the contracted volumes in June.

The cuts to Murban, Lower Zakum and Umm Shaif grades are the deepest since the UAE began cutting production late last year, in line with OPEC's pledged cuts totalling 4.2 million bpd.

ADNOC also said it would continue to keep shipping limits on exports in place for June, depriving buyers of the option to load an additional 5 percent above contracted volumes on each cargo, a standard industry practice known as operational tolerance.

Following are the cuts in ADNOC term crude supplies to Asian lifters since December 2008, in percent.

Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Murban 15 15 15 10 15 15 18 Lower Zakum 10 - 10 10 15 15 18 Umm Shaif 5 - 10 10 15 15 18 Upper Zakum 5 3 15 15 17 10 16