Med Crude-Urals weakens as Belarus row may boost exports

LONDON, Jan 17 (Reuters) - Urals crude fell to its weakest since May 2010 as traders said the Russian grade was pressured by strength in Brent prices combined with expectations of new export volumes amid a Russian-Belarussian oil price dispute.

Russia suspended crude oil flows to Belarus over a pricing dispute although it continued exports to Germany and Poland via Belarus along the Druzhba pipeline. [ID:nLDE70D11W]

Russia has already sent extra cargoes for loading in January to the Black Sea and on Monday traders said up to three cargoes were expected to appear in the Polish port of Gdansk in the near future.

Moscow and Minsk were scheduled to hold high-level talks later this week but trading sources said they did not expect a quick breakthrough. Products traders said they thought Belarus had fully suspended diesel exports [ID:nWLA2967].

In the Platts window, Statoil bought from Shell a late January-early February cargo in northwest Europe at dated minus $2.75, some 35 cents weaker than on Friday, traders said.

In the Mediterranean, Gunvor was offering a 80,000 tonnes cargo for late January-early February delivery at minus $2.25, some 10 cents stronger, but failed to find buyers.

Hellenic Petroleum was holding a tender in the Mediterranean for late January-early February, which could support the market.

Russia's pipeline monopoly Transneft has issued its preliminary early loading dates for February potentially showing tight supplies from the Baltic port of Primorsk for a second consecutive month.

The plan showed only one cargo on Feb. 3 instead of the usual two or three cargoes but the schedule has yet to be finalised.

Belarus also said it had agreed with Ukraine a two-year deal on oil transit through Ukraine's Odessa-Brody pipeline in a bid to find an alternative source to Russian crude deliveries. [ID:nLDE70G1HJ]

In other grades, Azerbaijan's oil output edged up to 51 million tonnes from 50 million tonnes in 2009 with the rise being a very modest one after years of speedy growth. [ID:nLDE70D20C] Kazakhstan's 2010 output was up 4 percent to near 80 million tonnes.

Urals margins for complex refineries in the Mediterranean remained in negative territory on Monday compared to the annual average of plus $2.77 a barrel, Reuters models showed.

Contract for differences showed Urals in the Mediterranean trading at around current levels or weaker of minus $2.75-$2.85 to dated in the first quarter of 2011 with the weakness also prevailing on the Baltic Sea market at minus $2.80-$3.00 to dated.

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


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