LONDON, Jan 21 (Reuters) - Urals crude differentials weakened further on Friday as tensions escalated between Russia and Belarus, promising to put extra pressure on the grade next week.
Poor though slightly stronger refining margins were also discouraging bidding for the grade from the world's largest oil producer, which this week weakened to below minus $3 per barrel to dated Brent for the first time since the third quarter of 2008.
"Refining margins have improved because Urals is so weak but the flat price remains very strong. So there is not much interest in sour crudes including CPC, Iraq or Iran from refiners," said a major buyer in the Mediterranean.
He said continuing tensions between Russia and Belarus could depress the grade as low as minus $4 to dated Brent next week although it could be supported by a relatively well-supplied Urals export programme.
A pricing dispute that has halted Russian crude flows to Belarus escalated on Friday when Russian oil pipeline monopoly Transneft said it had redirected oil earmarked for Belarus to alternative buyers in January. [ID:nLDE70K06D]
Transneft said it had redirected flows to Gdansk, Primorsk and Novorossiisk in January, saying the flows were around 1.5 million tonnes per month.
Transneft also released early loading dates for February showing stable volumes from the Black Sea port of Novorossiisk and slightly lower volumes from Primorsk, which would load only one cargo on Feb. 3 instead of the usual two per day.
In the Platts window, Vitol offered a 140,000 tonnes cargo from Novorossiisk at minus $3.70 to dated, some 30-40 cents weaker than estimates on Thursday, traders said.
Gunvor offered a 80,000 tonnes cargo in the south at minus $3.05, also 25 cents weaker.
Gunvor and BP were also bidding for Urals in northwest Europe at minus $3.60-$3.80 to dated. Traders said the market might be a bit stronger as it is unusual for Gunvor to bid for volumes instead of selling. They said they struggled to explain the strategy of the powerful trader on Friday.
Complex margins on Urals in the Mediterranean returned into
a negative territory on Friday having been there
for most of January in sharp contrast with the annual average of
plus $2.73 a barrel.
(Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; editing
by Anthony Barker)
(Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; editing by Anthony Barker)