LONDON, Oct 1 (Reuters) - Russian Urals and Azeri Light crude oil differentials weakened sharply on Monday as traders cited ample supply as weighing on the market and outpacing demand from refiners.
In the Platts window, Statoil bought a Urals cargo from Gunvor loading Oct 14-18 from Primorsk at dated Brent minus $1.90 per barrel, some 45 cents weaker than prices last week.
Azeri Light also weakened by 50 cents after Socar offered the grade from Supsa or Ceyhan for Oct 19-23 delivery at dated Brent plus $2.50.
In the Mediterranean, Vitol offered a 140,000 tonne Urals cargo loading Oct 11-15 from Novorossiisk at dated Brent minus $1.75, some 10 cents weaker than price indications last week.
"Margins are good for all types of crude but there are more volumes than refiners can take. It is a very simple imbalance story," said a big trader in the Mediterranean.
He said prices needed to fall further to attract buyers despite refiners enjoying several weeks of very high refining margins.
"From a regional perspective, it appears to increasingly be the case that the European refining sector is indirectly benefiting from the U.S. shale fortune, as light sweet crude becomes available at relatively affordable prices," JBC Energy consultancy said on Monday.
"The freight and crude cost disadvantages that the Asian refiners suffer from suggests that most of them will not be able to compete in Atlantic Basin and trans-Pacific markets, meaning that the increasing regional overcapacity will most likely lead to a poor margin environment and refinery consolidations over the coming years," JBC added.
Iraq's oil exports rose to 2.6 million barrels per day (bpd) on average in September, the highest in more than three decades.
The Kurdish Energy Minister said he expected oil payments from Baghdad to be transferred on Sunday, offering hope that a long-running conflict between the central government and the autonomous region is easing.
There was no news on payments as of Monday evening. Kurdistan has threatened to suspend exports from Ceyhan on the Mediterranean if payments are not made.
(Reporting by Dmitry Zhdannikov, editing by William Hardy)
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Keywords: MARKETS MEDITERRANEAN/CRUDE