MOSCOW: Urals crude in the Mediterranean was lower for a third day on Thursday as there was only limited demand after the end of the French refinery strikes and an overhang of alternative sour grades also pressured the market, traders said.
Urals differentials in the Mediterranean have lost some $0.50 a barrel since last Monday, according to Thomson Reuters data.
"The physical crude market is showing increasing signs of weakness," JBC Energy wrote. "Contangos for crude futures are beginning to widen again but this is nothing compared to the prompt end of the CFD curve, which is now in steep contango, likely on the back of less buying interest from France as it runs down its floating stocks."
A contango market structure is usually a sign of plentiful supplies.
"There's a substantial surplus of Basra in the market that has no place to go, and it starts pushing Urals (levels) down," a source with a trading firm said.
In the Platts window, Vitol was offering an 80,000-tonne cargo of Urals from Novorossiisk on July 2-6 down to dated Brent minus $2.10 a barrel, where it was booked by Eni. That was some 15 cents below Vitol's offer on Wednesday.
There was no activity for Urals in the Baltic, Azeri light and CPC Blend in the Platts window, traders said.
Azeri differentials were seen higher on Thursday, as considerable volumes of the grade for loading in July were booked for delivery to Asia, traders said. Outside the window, OMV bought a cargo of Azeri light for delivery in mid-July, traders said, but no details followed.
Elsewhere, Indian companies are evaluating buying stakes in Russian state oil firm Rosneft, India's oil minister said on Thursday, as Moscow seeks funds to address its state deficit.
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