December 29, 2011 / 6:43 PM / 7 years ago

Med Crude-Azeri falls to lowest since Libya war

* Urals falls to 6-month low
    * Petroplus still cited as key factor
    * Many bullish factors could reverse the trend quickly

    LONDON, Dec 29 (Reuters) - Russian Urals crude fell to
a six-month low on Thursday in another record plunge for a
second day running and sweet Azeri Light grade plunged to a
10-month low as market players cited a fleet of unsold cargoes
and fears of a stoppage of Swiss refiner Petroplus.	
    "If the Petroplus system shuts down... Europe will have to
increase its imports of diesel from India and the U.S. Gulf
while Brent should be under pressure from the loss of sweet
crude oil demand on the U.S. East Coast, Petroplus and the
increased Libyan exports," said Olivier Jakob from Petromatrix.	
    Embattled Swiss-based oil refiner Petroplus was hit
with credit-rating cuts from Moody's and Standard & Poor's on
Thursday as its lending banks tried to thrash out a solution to
keep the debt-laden company afloat. 	
    Azeri is similar to Brent and Libyan crude and on Thursday
it effectively fell to its lowest since a civil war started to
reduce Libyan output in February and later shut it down.	
    Chevron and Socar offered Azeri Light with final offers
coming in as low as dated Brent plus $2.80 a barrel, some 70
cents lower than previous price indications.	
    Statoil sold a cargo of Urals to BP in the Baltic at dated
Brent minus $2.15, $1 lower than on Wednesday, when the market
also fell by around $1, the biggest session-on-session fall
since July 2008.	
    In the Mediterranean, Total was offering a large SuezMax
cargo at dated minus $2.55, some 85 cents weaker than on
Wednesday. Trafigura offered Siberian Light at dated plus $1.10,
also down around $1 from Wednesday but traders said the thought
the grade should trade weaker.	
    "The market is already long so if Petroplus shuts down we
will face quite a surplus," one trader in Urals and Azeri said.	
    Among the bullish factors traders cited a lack of interest
from buyers ahead of long holidays, storms in Novorossiisk,
which have already delayed a few cargoes on the Black Sea and 
improving margins due to a fall in Brent futures prices.	
    Some barrels were still being expected to sail to Asia and
the United States but details were scarce.	
    JBC Energy analysts said it believed support for Urals was
on its way.	
    "It is currently trading below Oman, opening the window for
arbitrage to Asia. Moreover, if the EU enforces an embargo on
imports of Iranian crude, we can expect a very quick return of
the Urals premium over Brent," it said.	
    In tender news, Surgut awarded three cargoes from Primorsk
before the Platts window at around minus $0.80-$1.60 with some
traders saying some cargoes could have been picked up by BP.	
    Iraq's oil exports to Turkey through the Kirkuk-Ceyhan
pipeline were halted on Thursday due to low volumes in storage
in Iraq, two North Oil Company sources said.	
 (Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; editing
by Jason Neely)
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