Med Crude-Urals rise in south as June cargoes become scarce
Russian Urals crude was stronger in the Mediterranean on Tuesday and unchanged in the Baltic as traders assessed the impact from a surprise spot tender which oil major Rosneft called to sell export crude after an accident at a Russian refinery.
Rosneft was selling 0.44-0.98 million tonnes of Urals crude following the accident at the Achinsk refinery over the weekend, market sources said. The plant suspended operations after a deadly blast.
It was offering 0.3-0.7 million tonnes of Urals loading at Primorsk and Ust-Luga in the Baltics and 0.14-0.28 million tonnes from the Black Sea port of Novorossiisk loading in July.
The tender closes June 19 with results known by June 23.
Before the accident, traders expected July loadings from Russia to be on par with the small June programme as local refineries increase runs, thus supporting prices for Russia’s main exports blend Urals. For a table of early July loading
“The tender is clearly bearish,” one trader with a major said.
In the Platts window, Eni offered a cargo of Urals in the Baltic for early July at dated Brent minus $2.85, but found no buyers as prices were perceived as too strong as Urals refining margins were still deeply in negative territory, traders said.
In the Mediterranean, Lukoil bid for a 80,000 tonne cargo of Urals for late June at dated Brent minus $1.45 a barrel, some 25 cents stronger than previous price estimates but found no sellers, traders said.
Eni offered a 80,000 tonne Urals cargo in the Mediterranean for later dates - for July 5-9 - at dated Brent minus $1.45 but found no buyers.
Eni bid for a cargo of Azeri Light for early July at dated Brent plus $2.30, some 30 cents stronger than previous price estimates, but found no sellers.
Vitol offered a cargo of CPC for early July at dated Brent minus $1.65 a barrel, some 65 cents weaker than previous price estimates but found no buyers.
Adding to potential bearish news in the Urals market, a fire broke out at Russia’s Kirishi refinery owned by oil firm Surgut.
In tender news, Surgut will sell 200,000 tonnes of Urals loading June 30-July 1 and July 2-3 at a tender this week.
Poland’s PKN offered to buy a cargo of Urals in the Baltic for delivery on July 1-5 and Ina was reported to have awarded a Urals tender to Vitol.
Small Russian oil firm Zarubezhneft was seeking 80,000 tonnes of Urals in the Mediterranean for delivery to the port of Omisalj in Croatia in mid July.
Also in the Mediterranean, China’s Unipec was believed to be shipping 2 large Suezmax cargoes with Urals to Asia from the end of June programme.
“This is supporting Urals,” one trader said adding that although the arbitrage was closed on paper, the Chinese company was still doing it regardless of the economics as it has often done it in the past when it required volumes in China.
Iraq’s biggest oil refinery, Baiji, has been shut down and its foreign staff evacuated, officials said, adding that local staff remain in place and the military is still in control of the facility.
Iraq will need to import about half its oil product needs, more than 300,000 barrels per day, after the refinery closed, a senior oil official said.
Iraqi Kurdistan’s natural resources minister said the region plans to continue oil exports and will be able to meet its allocated budget through independent oil shipments by the year-end.
The Indian government has asked state-controlled oil refiners to prepare contingency plans to deal with possible supply outages caused by the conflict in Iraq, a senior Oil Ministry official told Reuters.
Iraqi Kurdistan’s Natural Resources Minister said the region had completed a link connecting the Kirkuk oil hub to its newly built pipeline to Turkey.
Iraq’s Kurds have established control over the northern city of Kirkuk and its oil reserves and effectively achieved their “dream of a greater Kurdistan”, the chairman of Iraq’s oil and gas committee said.
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