Med Urals Market Awaits Short May Loading Schedule

Maritime Activity Reports, Inc.

April 15, 2014

Activity in the Russian Urals crude market froze on Tuesday as traders said they were awaiting the first loading dates for May for signs of how much supplies from the world's top oil producer could fall next month.

Traders said they anticipated lower exports from Russia in May as several major domestic refineries were set to end their maintenance works.

The Urals swaps market showed expectations for prices to strengthen in May to around dated Brent minus $1 per barrel, some 30-40 cents stronger than current price estimates.

Traders also spoke about a physical deal being done in the Baltic on Tuesday for a cargo of Urals at dated Brent minus $1.30 a barrel, a notch stronger than prices on Monday, but that could not be verified.

"I don't think the May Urals program will be very short but certainly it will be shorter than April," one trader said.

Russia's No.2 oil producer Lukoil has agreed to sell its 50 percent share in a company that owns oil and gas projects in Kazakhstan to China's Sinopec for around $1.2 billion.

In light grades, a tanker was due to load 1 million barrels of crude on Tuesday from Libya's reopened Hariga port, its first export shipment since a deal to end months of closures at its main oil terminals, the National Oil Corp. (NOC) said.

Hariga remains the only terminal which has seen force majeure on its operations lifted.

The situation at the smaller Zuetina facility south of Benghazi is less clear: although it was slated to reopen as part of the deal secured between Tripoli and separatists, there has still been no confirmation of any restart more than a week after the initial agreement.

"All in all, Hariga represents only a minor proportion of Libya's total export capacity, and it is worth keeping in mind that even if loadings there do go ahead, crude exports will remain significantly below January levels," JBC Energy consultancy said in a note.

"Meanwhile, the country's two largest ports, Es Sider and Ras Lanuf, remain under separatist control. Given the status of the country's other ports, we see total export capacity reaching some 300,000 bpd this week," JBC added.

(Reporting by Dmitry Zhdannikov; Editing by David Evans)

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