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Med crude-Tight supplies support Urals in South
July 16, 2012 / 5:38 PM / 5 years ago

Med crude-Tight supplies support Urals in South

LONDON, July 16 (Reuters) - Spot differentials for Russian
Urals were supported on Monday by a lack of supply in the
Mediterranean, where the loss of Iranian oil due to Western
sanctions is pushing up premiums of sour grade alternative
crudes.
    There were no bids or offers in the Platts window but
traders said Urals differentials in the south were being
discussed at as high as dated Brent plus $1. 
    "Unfortunately, yes it is possible," said a trader,
commenting on a reported increase in Urals cargo prices in the
region.
    The rise in prices in the south has already prompted an
Italian refiner to ship Urals cargoes from Northwest Europe to
the Mediterranean, a rare arbitrage movement made possible by a
lack of supply in the area and low shipping rates.
    Sweet grade crudes remained weak, as slowing global economic
growth continues to weigh on petrochemical industry demand for
naphtha, which in turn is dampening prices for naphtha-rich
crudes like Kazakhstan's main export grade CPC Blend.
    However, low prices for sweet grades crude may be attracting
buyers further afield, with one trader reporting Thai refiner
and petrochemical firm IRPC had purchased Saharan Blend for
loading in August.
    "They did well (to purchase Saharan Blend) as they won't
have paid much for it," said another trader, commenting on talk
of the deal.
    
    TENDERS
    * The results of a Turkish tender by state-owned oil firm
TPAO to sell a 600,000 barrel cargo for loading in the second
half of August were due on Tuesday. Azeri Light was steady on
Monday, although traders said prices were still around a quarter
dollar below $3 to dated Brent. 
    * "At $3 a tonne to dated Brent, there's no interest," said
a trader.
    * Tengizchevroil (TCO) was expected to sell 4-5 cargoes of
CPC Blend via a tender, but further details did not emerge.
Traders were doubtful the company would be able to attract bids
above its current discount of minus $1.50 to dated Brent.
    
    LOADING
    * Loading delays affecting Iraqi Kirkuk have worsened,
traders said, reporting that cargoes were sailing up to 19-20
days after laycan. Despite this, traders said demand for the
grade was steadfast due to the lack of Iranian crude, under full
embargo since July 1, and tight Urals supplies.
    * Exports of Iraqi Basra Light are expected to be 2.14
million barrels per day in July, according to preliminary
loading programmes from a shipping source. The volume is higher
than the preliminary June programme of 2.03 mln bpd. Overall,
Iraqi oil exports fell in June. [ID: nL6E8I15NA]
    * Russia's pipeline monopoly Transneft has released early
loading dates for August showing no major repair or maintenance
works. Primorsk in the Baltics was due to load 9 cargoes between
July 31 and Aug. 4, while Ust Luga was due to load 3 cargoes
between July 31 and Aug. 4. In the Black Sea, some 3 Suezmax and
2 Aframax tankers between July 31 and Aug. 4 were due to load at
Novorossiisk.
    * Russian oil export duty is expected to decline in August
to $336.6 per tonne from $369.3 in July, according to
calculations by the Finance Ministry and Reuters, following a
decline in oil prices. 

 (Reporting by Jessica Donati, Julia Payne, Ikuko Kurahone and
Dmitry Zhdannikov; Editing by Anthony Barker)

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