MOSCOW: Urals differentials remained stable in northwest Europe as Surgutneftegaz tender results proved the market was still firm despite slightly higher exports from Baltic ports planned for the first half of December.
Russia's Surgutneftegaz awarded a tender on Wednesday to sell 200,000 tonnes of Urals loading from Primorsk on Dec. 9-10 and from Ust-Luga on Dec. 11-12 to Shell and Litasco at discounts of $1.80-1.90 a barrel to BFOE (Brent-Forties-Oseberg-Ekofisk), traders said.
The levels were slightly above the market as normally buyers pay a bit more in Surgutneftegaz's tenders to win the competition, but market sentiment was still around a discount of $1.90 a barrel to BFOE, traders said.
In the Platts window, Italy's Eni unsuccessfully bid for 100,000 tonnes of Urals loading from Baltic ports on December 6-10 at a discount of $2.05 a barrel to BFOE, traders said.
Traders thought that the short loading plan from Novorossiisk may open an arbitrage window from the Baltic to the Mediterranean despite high freight rates.
Traders already cite some fixtures with an option for arbitrage for Urals shipments to the south of Europe and say that freight rates are not rising any more and are even easing a bit in northwest Europe.
There were no bids or offers for Urals in the Mediterranean in the Platts window, traders said, as market participants were slightly surprised by a short Urals loading plan and were not ready to agree on a price level until the full loading plan is available.
The Urals preliminary loading plan for Dec. 1-12 is available here: There were no bids or offers for CPC Blend or Azeri Light in the Platts window on Wednesday, traders said.
Both Caspian grades were popular with buyers from outside the region.
In November a couple of vessels of CPC Blend went to Japan and to Canada. Azeri Light actively flows to India, Thailand and Taiwan. Arbitrage shipments and good light-distillate cracks helped Caspian grades to stay firm.
Algerian Saharan Blend is also benefitting from fine naphtha cracks: nearly all December-loading cargoes of the grade are thought to be sold and traders said that the recent deals were done above a premium of $0.20 a barrel to BFOE.
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