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Med Crude-Urals stronger as volumes thin, refinery runs rise

LONDON, Oct 4 (Reuters) - Russian Urals crude strengthened on Thursday as traders cited scarce remaining barrels from the October programme and increased refining runs in Russia and Europe.

"I think the market will tighten for November-December as refiners come back on stream in Russia, so you would see less barrels for exports," a trader with a major said.

"Germany and Poland will continue buying more crude from the sea to compensate for lower supplies along the Druzhba pipeline, which will also give the market some support," he added.

In the Platts window, Eni bid for a 80,000-tonne end-October cargo of Urals at dated Brent minus $1.35, some 25 cents stronger than bids earlier this week, traders said.

Traders pointed to Urals swaps as also indicating some tightening with the grade seen trading at stronger than minus $1 in November.

One trader with a major said that also supporting the market was information about an Asia player collecting volumes for a very large crude carrier (VLCC) to be sent to Asia in coming weeks.

A major Asian player said such a possibility existed but had become less likely since the grade strengthened over the past week.

In Russian refining news, oil processing at Saratov oil refinery, owned by Anglo-Russian company TNK-BP

, was suspended on Thursday after it caught fire.

Azeri Light crude was seen to trade stronger at dated Brent plus $2.30 after weakening to as low as plus $2.05 a barrel earlier this week.

Urals and Azeri margins have now remained at very healthy levels for a number of weeks.

Europe is seeing a supply crunch in gasoil and diesel due to refinery maintenance, a factor that will underpin prices even if crude falls, weighing on the region's struggling economy.

Kazakhstan plans to begin processing some of its crude oil in China this year to make up for a shortfall in domestic refining capacity, a senior official said on Thursday.

On Wednesday, Saudi Arabia released its official selling prices for November crude with a rise in prices for Asian and U.S. buyers and cuts for European customers.

"In Europe, the lower OSPs tracked the market for Russian Urals which has come under pressure following the end of peak replacement requirements for Iranian crude as well as higher inflows from Iraq," JBC Energy said on Thursday.

"The higher prices for U.S. customers, especially for lighter grades are a little surprising given the region's higher availability of lighter crude from expanding shale plays and may suggest an intention by Aramco to redirect flows away from the U.S.," JBC added.

(Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; editing by Anthony Barker)

((dmitri.zhdannikov@thomsonreuters.com)(+44 207 542 38 13))

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Keywords: MARKETS MEDITERRANEAN/CRUDE