MOSCOW: Urals crude price differentials were under pressure on Tuesday due to poor fundamentals and a fire at a Romanian Petromidia refinery that uses the grade.
A rise in Urals exports from Novorossiisk shown in the preliminary loading plan for the first 10 days of September, and muted demand from regional buyers due plentiful alternatives also weighed.
A fire broke out on Aug. 22 at the vacuum distillation unit of Petromidia, operated by Rompetrol and owned by Kazmunaigaz, used for making feedstocks for gasoline and diesel producing units.
Rompetrol said the section was shut down after the fire and the refinery is running at reduced rates.
Traders said the accident may cause an overhang of Urals in the Mediterranean as Rompetrol used to ship to the refinery two-three cargoes monthly.
"Currently most of Urals loading in the first ten days of September are unsold, if Rompetrol also stops purchases the situation will become even worse," one trader said.
Litasco, the main buyer of Urals in the Mediterranean, showed low demand and was interested in selling Urals as well.
Traders thought that the company was earning higher margins from running Iraqi crude.
Last week Iraqi state company Somo restarted pumping of its crude via the Kirkuk-Ceyhan pipeline. Current shipments of 70,000 barrels per day will rise to 150,000 barrels per day in the short term.
In the Platts window Vitol offered 140,000 tonnes of Urals loading from Novorossiisk on September 6-10 at dated Brent minus $2,35 per barrel, but did not find a buyer.
Vitol also unsuccsessfully offered 80,000 tonnes of Urals loading on September 2-6 down to a discount of $1.55 a barrel to BFOE.
The last deal on bigger Suezmax Urals cargoes was done at a discount of $2.40 a barrel to BFOE. Petrogal was said to be the buyer of the cargo.
In northwest Europe Vitol also offered 100,000 tonnes of Urals loading from Baltic ports on September 6-10 down to a discount of $1,90 per barrel, but buyers assessed it around a discount of $2.20 a barrel to BFOE.
There were no offers or bids for Azeri Light, Siberian Light or CPC Blend in the Platts window on Tuesday, traders said.
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